Revision of December 2000 Regulatory Finding on the Emissions of Hazardous Air Pollutants From Electric Utility Steam Generating Units and the Removal of Coal- and Oil-Fired Electric Utility Steam Generating Units From the Section 112(c) List

Federal RegisterMar 29, 2005

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[OAR-2002-0056; FRL-7887-7]

RIN 2060-AM96

Revision of December 2000 Regulatory Finding on the Emissions of Hazardous Air Pollutants From Electric Utility Steam Generating Units and the Removal of Coal- and Oil-Fired Electric Utility Steam Generating Units From the Section 112(c) List

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

The EPA is revising the regulatory finding that it issued in December 2000 pursuant to section 112(n)(1)(A) of the Clean Air Act (CAA), and based on that revision, removing coal- and oil-fired electric utility steam generating units (“coal- and oil-fired Utility Units”) from the CAA section 112(c) source category list. Section 112(n)(1)(A) of the CAA is the threshold statutory provision underlying today's action. That provision requires EPA to conduct a study to examine the hazards to public health that are reasonably anticipated to occur as the result of hazardous air pollutant (HAP) emissions from Utility Units after imposition of the requirements of the CAA. The provision also provides that EPA shall regulate Utility Units under section 112, but only if the Administrator determines that such regulation is both “appropriate” and “necessary” considering, among other things, the results of the study. EPA completed the study in 1998 (the Utility Study), and in December 2000 found that it was “appropriate and necessary” to regulate coal- and oil-fired Utility Units under CAA section 112. That December 2000 finding focused primarily on mercury (Hg) emissions from coal-fired Utility Units. In light of the finding, EPA in December 2000 announced its decision to list coal- and oil-fired Utility Units on the section 112(c) list of regulated source categories. In January 2004, EPA proposed revising the December 2000 appropriate and necessary finding and, based on that revision, removing coal- and oil-fired Utility Units from the section 112(c) list.

By this action, we are revising the December 2000 appropriate and necessary finding and concluding that it is neither appropriate nor necessary to regulate coal- and oil-fired Utility Units under section 112. We are taking this action because we now believe that the December 2000 finding lacked foundation and because recent information demonstrates that it is not appropriate or necessary to regulate coal- and oil-fired Utility Units under section 112. Based solely on the revised finding, we are removing coal- and oil-fired Utility Units from the section 112(c) list. The reasons supporting this action are described in detail below. Other actions related to this final rule include the recent promulgation of the final Clean Air Interstate Rule (CAIR) and the final Clean Air Mercury Rule (CAMR).

DATES:

Effective Date:

The effective date of the final rule is March 29, 2005.

ADDRESSES:

EPA has established a docket for this action under Docket ID No. OAR-2002-0056. All documents in the docket are listed in the EDOCKET index at

http://www.epa.gov/edocket

. Although listed in the index, some information is not publicly available,

i.e.

, Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in EDOCKET or in hard copy at the EPA Docket Center (EPA/DC), EPA West Building, Room B102, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the EPA Docket Center is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT:

Ms. Wendy Blake, OGC Attorney, Office of General Counsel, Environmental Protection Agency, (AR-2344), Washington, DC 20460 telephone number: (202) 564-1821; fax number: (202) 564-5603; e-mail address:

blake.wendy@epa.gov.

Judicial Review.

Pursuant to CAA section 307(b), judicial review of this final rule is available only by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit by May 31, 2005. EPA designates this action a CAA section 307(d) rulemaking. (See CAA section 307(d)(1)(V); 69 FR 4653 (January 30, 2004).) Under CAA section 307(d)(7)(B), only an objection to the rule that was raised with reasonable specificity during the time period for public comment can be raised during judicial review. Section 307(d)(7)(B) further provides that if the person raising the objection can demonstrate to the Administrator that it was impracticable to raise the objection during the public comment period or if the grounds for the objection arose after the public comment period but within the time period specified for judicial review and if the objection is of central relevance, EPA will convene a proceeding for reconsideration of the rule and provide the same procedural rights as would have been afforded had the information been available at the time the rule was proposed.

I. Statutory Background

In the 1990 Amendments to the CAA, Congress substantially modified CAA section 112, the provision of the CAA addressing HAP. Among other things, section 112 contains a list of “hazardous air pollutants,” which are “pollutants which present, or may present, * * * a threat of adverse human health effects * * * or adverse environmental effects whether through ambient concentrations, bioaccumulation, deposition, or otherwise.” (See CAA section 112(b)(2).) In the 1990 amendments to the CAA, Congress listed 190 HAP, and authorized EPA to add or remove pollutants from the list.

(See CAA Section 112(b)(1)-(b)(3).)

The current section 112(b) list includes 188 HAP.

The types of sources addressed under section 112 include: major sources, area sources, and electric utility steam generating units (Utility Units). (See CAA 112(a)(1), (a)(2), (a)(8).) A “major source” is any stationary source

or group of stationary sources at a single location and under common control that emits or has the potential to emit ten tons or more per year of any HAP or 25 tons or more per year of any combination of HAP. (See CAA 112(a)(1).) A stationary source of HAP that is not a “major source” is an “area source.” (See CAA 112(a)(2).) Finally, an electric utility steam generating unit is any “fossil fuel fired combustion unit of more than 25 megawatts that serves a generator that produces electricity for sale.” (See CAA 112(a)(8).)

A “stationary source” of hazardous air pollutants is any building, structure, facility or installation that emits or may emit any air pollutant. (See CAA Section 111(a)(3) and 112(a)(3).)

There are two important steps under section 112: (1) Determining whether a source category meets the statutory criteria for regulation under section 112; and (2) promulgating emission standards for those source categories regulated under section 112. In terms of the first step, Congress required EPA to publish a list of categories and

subcategories of major sources and area sources by November 15, 1991.

(See CAA 112(c)(1) & (c)(3).) Congress further directed EPA to revise this initial list periodically, based on, for example, new information. (See 112(c)(1).) EPA is required to list a category of major sources under section 112(c)(1) if at least one stationary source in the category meets the definition of a major source—

i.e.

, if a certain amount of a HAP (or combination of HAP) is emitted from the source. (See 112(a)(1).) By contrast, EPA is required to list categories or subcategories of area sources only if they meet one of the following statutory criteria: (1) EPA determines that the category of area sources presents a threat of adverse effects to human health or the environment that warrants regulation under CAA section 112; or (2) the category of area sources falls within the purview of CAA section 112(k)(3)(B) (the Urban Area Source Strategy). (See CAA 112(c)(3).)

EPA published the initial list on July 16, 1992. See 57 FR 31,576, July 16, 1992. EPA did not include Utility Units on the initial section 112(c) list because Congress required EPA to conduct and consider the results of the study required by section 112(n)(1)(A) before regulating these units and, therefore, listing in 1992 was not authorized by statute.

For those source categories regulated under section 112, the next step concerns the establishment of emission standards. Under section 112(d), EPA must establish emission standards that “require the maximum degree of reduction in emissions of the hazardous air pollutants subject to this section” that the Administrator determines is achievable based on technology, taking into account certain factors such as cost, energy requirements, and other impacts. The emission standard for new sources cannot be, however, less stringent than the level of control achieved by the best controlled similar source, and the emission standard for existing sources cannot be less stringent than the average emission limitation achieved by the best performing 12 percent of existing sources in the category, regardless of cost, energy requirements and other impacts. CAA 112(d)(2) and (3). Finally, within eight years after promulgation of section 112(d) emission standards for a listed source category, EPA must promulgate additional standards if such standards are necessary to provide an ample margin of safety to protect public health or to prevent an adverse environmental effect. (See CAA section 112(f).) These additional standards under CAA section 112(f) are commonly referred to as “residual risk” standards.

The criteria for listing major and area sources established in section 112(c)(1) and (c)(3) do not apply to Utility Units because Congress treated Utility Units differently from other major and area sources. Indeed, Congress enacted a special provision for Utility Units in section 112(n)(1)(A), which governs whether Utility Units should even be regulated under section 112.

Section 112(n)(1)(A) directs EPA to conduct a study to evaluate what “hazards to public health [are] reasonably anticipated to occur” as the result of HAP emissions from Utility Units “after imposition of the requirements of th[e] Act,'' (emphasis added) and to report the results of such study to Congress by November 15, 1993. Congress also directed EPA to describe in the report to Congress “alternative control strategies for [those] emissions that may warrant regulation under this section.” (See CAA section 112(n)(1)(A).) Section 112(n)(1)(A) further provides that EPA shall regulate Utility Units under section 112 if the Administrator determines, considering the results of the study, that such regulation is “appropriate and necessary.” Thus, unlike other major and area sources, Congress first required EPA to examine how “imposition of the requirements of th[e] Act” would affect the overall level of utility HAP emissions, and then determine whether regulation of Utility Units under section 112 is both appropriate and necessary. Section 112(n)(1)(A) therefore sets an important and unique condition precedent for regulating Utility Units under section 112 and provides EPA discretion in determining whether that condition precedent has been met.

No one would dispute that certain Utility Units would meet the definition of a “major source” based on the quantity of HAP emitted from such units, or that other Utility Units may meet the “area source” criteria for listing under section 112(c)(3), but Congress recognized this fact in 1990 and specifically enacted section 112(n)(1)(A), which establishes an entirely different test for determining whether Utility Units should be regulated under section 112.

II. Regulatory Background

A. EPA's December 20, 2000 Regulatory Finding

On December 20, 2000, EPA issued a finding pursuant to CAA section 112(n)(1)(A) that it was appropriate and necessary to regulate coal- and oil-fired Utility Units under section 112. In making that finding, EPA considered the Utility Study, which was completed and submitted to Congress in February 1998.

In the Utility Study, we divided Utility Units into three subcategories based on fuel type: coal-, oil-, and gas-fired units. We then analyzed HAP emissions from each subcategory. We followed this approach because each subcategory burns a different fuel, which, in turn, leads to different emissions profiles, which can require different emission controls. This approach is also consistent with EPA's historical practice of subcategorizing Utility Units based on fuel type. (

See, e.g.,

40 CFR 60.44(a).)

Because EPA subcategorized Utility Units for purposes of the Utility Study, EPA, in December 2000, made separate “appropriate and necessary” findings under section 112(n)(1)(A) for gas-fired, coal-fired, and oil-fired Utility Units. In making these findings, EPA considered the Utility Study and certain additional information obtained after completion of the Utility Study, including the National Academy of Sciences' report concerning the health effects of methylmercury and actual emissions data obtained in response to an information collection request EPA issued to all coal-fired Utility Units in 1999.

See

65 FR 79826. EPA reasonably relied on this additional information because the information provided a more comprehensive and contemporaneous record concerning Hg emissions from coal-fired units. Nothing in section 112(n)(1)(A) suggests that Congress sought to preclude EPA from considering more current information in making the appropriate and necessary finding.

In the December 2000 finding, EPA determined that it was appropriate and necessary to regulate coal- and oil-fired units, but not gas-fired units.

With respect to the latter, EPA found that regulation of HAP emissions from natural gas-fired Utility Units “is not appropriate or necessary because the

impacts due to HAP emissions from such units are negligible based on the results of the study documented in the utility RTC.

” (Emphasis added)

See

65 FR 79831.

Although the December 2000 finding addressed three subcategories of Utility Units—coal-, oil-, and gas-fired units, the majority of the finding concerned Hg emissions from coal-fired power plants. 65 FR 79826-29 (explaining that Hg from coal-fired units is the HAP of greatest concern); Utility Study, ES-27 (“mercury from coal-fired utilities is the HAP of greatest potential concern.”).

EPA provided three primary reasons in support of its finding that it was “appropriate” to regulate coal- and oil-fired Utility Units under section 112. First, EPA found that it was appropriate to regulate HAP emissions from coal- and oil-fired Utility Units because Utility Units “are the largest domestic source of Hg emissions.”

See

65 FR 79830. EPA next found that it was

appropriate to regulate coal- and oil-fired Utility Units because “mercury in the environment presents significant hazards to public health and the environment.”

See

65 FR 79830. Finally, EPA explained that it was appropriate to regulate HAP emissions from coal- and oil-fired units because it had identified certain control options that, it anticipated, would effectively reduce HAP from such units. In discussing the appropriate finding, EPA also noted that uncertainties remained concerning the extent of the public health impact from HAP emissions from oil-fired units. Thus, EPA's determination that it was “appropriate” to regulate coal- and oil-fired units under section 112 hinged on the health effects associated with Hg emissions from coal-fired Utility Units, the uncertainties associated with the health effects of HAP from oil-fired Utility Units, and EPA's belief that control options would be available to reduce certain utility HAP emissions.

Section IV below addresses our conclusion that it is not appropriate and necessary to regulate coal- and oil-fired Utility Units under section 112 and explains why we now believe that our December 2000 finding lacked foundation. As explained below, one of the reasons the December 2000 “appropriate” finding for oil-fired Utility Units lacks foundation is because the record that was before the Agency in December 2000 establishes that Hg is a HAP of concern only as emitted from coal-fired units, not oil-fired units. Utility Study ES-5,13,27. EPA therefore should not have relied upon Hg emissions as a basis for finding it was appropriate to regulate oil-fired units under section 112. (

See, e.g.,

Utility Study ES-5, ES-27.)

The “appropriate” finding for oil-fired units stemmed primarily from EPA's concerns over the potential health effects of nickel from such units. As explained in the January 2004 proposed rule, the record before the Agency in December 2000 supported a distinction between nickel and the other HAP emitted from oil-fired units.

See

69 FR 4688. We proposed that this distinction was reasonable based on the relative amount of nickel emitted from oil-fired units and the health effects associated with such emissions. (See also Utility Study at ES-12 (noting higher population concentrations surrounding oil-fired units). At the time of the proposed rule, we recognized, however, the uncertainties in the data underlying our “appropriate” finding for oil-fired units based on nickel emissions, and for that reason solicited information as to whether nickel emissions from oil-fired plants currently pose a hazard to public health.

Once EPA determined that it was “appropriate” to regulate coal- and oil-fired Utility Units under section 112 of the CAA, EPA next concluded that it was also “necessary” to regulate HAP emissions from such units under section 112. Interpreting the term “necessary” in section 112(n)(1)(A), EPA found that it was necessary to regulate HAP from coal- and oil-fired Utility Units “because the implementation of other requirements under the CAA will not adequately address the serious public health and environmental hazards arising from such emissions identified in the Utility RTC.”

See

65 FR 79830.

In light of the positive appropriate and necessary determination, EPA in December 2000 listed coal- and oil-fired Utility Units on the section 112(c) source category list.

See

65 FR 79831 (our finding that it is appropriate and necessary to regulate coal- and oil-fired Utility Units under section 112 “adds these units to the list of source categories under section 112(c).”). Relying on CAA section 112(e)(4), EPA explained in its December 2000 finding that neither the appropriate and necessary finding under section 112(n)(1)(A), nor the associated listing were subject to judicial review at that time. EPA did not add natural-gas fired units to the section 112(c) list in December 2000 because it did not make a positive appropriate and necessary finding for such units.

B. Litigation Challenging December 2000 Regulatory Finding

Shortly after issuance of the December 2000 Finding, an industry group challenged the December 2000 finding in the United States Court of Appeals for the District of Columbia Circuit (DC Circuit).

UARG

EPA,

2001 WL 936363, No. 01-1074 (DC Cir. July 26, 2001). EPA moved to dismiss the lawsuit on the basis of section 112(e)(4), which provides, in pertinent part, that “no action of the Administrator * * * listing a source category or subcategory under subsection (c) of this section

shall be a final agency action subject to judicial review,

except that any such action may be reviewed under such section 7607 of this title when the Administrator issues emission standards for such pollutant or category.” (Emphasis added.) (

See

CAA Section 112(e)(4).)

In its motion to dismiss the petition, EPA argued to the DC Circuit, among other things, that the December 2000 listing of coal- and oil-fired Utility Units was inseparable from the appropriate and necessary finding and that the appropriate and necessary finding and listing actions are not final agency actions pursuant to section 112(e)(4).

See also

65 FR 79826. EPA further noted in its motion to dismiss that both the finding and the listing would be subject to additional notice and comment as part of the section 112(d) rulemaking.

See

EPA's Motion to Dismiss,

UARG

EPA

, 2001 WL 936363, No. 01-1074S (“Because the decision to add coal and oil fired electric utility steam generating units to the source category list is not yet final agency action, it will be among the matters subject to further comment in the subsequent [standards] rulemaking.”); 65 FR 79831 (noting that issues related to the listing, such as “the exact dimension of the source category,” will be subject to additional comment in the emission standard rulemaking process). The DC Circuit dismissed the challenge to the December 2000 finding for lack of jurisdiction based on section 112(e)(4) of the CAA. The December 2000 finding and associated listing are therefore not final agency actions.

C. January 30, 2004 Proposed Rule and March 2004 Supplemental Notice

On January 30, 2004, EPA published in the

Federal Register

a proposed rule entitled “Proposed National Emissions Standards for Hazardous Air Pollutants; and, in the Alternative, Proposed Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam Generating Units.” (

See

69 FR 4652 (January 30, 2004).) In that rule, EPA proposed three alternative regulatory approaches. First, EPA proposed to retain the December 2000 Finding and associated listing of coal- and oil-fired Utility Units and to issue under section 112(d) maximum achievable control technology-based (MACT) emission standards for both subcategories. Second, EPA alternatively proposed revising the Agency's December 2000 Finding, removing coal and oil-fired Utility Units from the section 112(c) list,

and issuing final standards of performance under CAA section 111 for new and existing coal-fired units that emit Hg and new and existing oil-fired units that emit nickel. Finally, as a third alternative, EPA proposed retaining the December 2000 finding, removing coal and oil-fired Utility Units from the section 112(c) list, and regulating Hg emissions from Utility Units under CAA section 112(n)(1)(A).

We did not propose revising the December 2000 finding for gas-fired Utility Units because EPA continues to believe that regulation of such units under section 112 is not appropriate and necessary. We have not received any information that would cause us to change our conclusion in this regard. In fact, the information that we have received since the Utility Study only confirms the conclusion we reached in December 2000. We therefore take no action today with regard to the December 2000 finding for gas-fired Utility Units.

Shortly thereafter, on March 16, 2004, EPA published in the

Federal Register

a supplemental notice of proposed rulemaking entitled “Supplemental Notice of Proposed National Emission Standards for Hazardous Air Pollutants; and, in the Alternative, Proposed Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam Generating Units.”

See

69 FR 13298 (March 16, 2004). In that

notice, EPA proposed certain additional regulatory text, which largely governed the proposed section 111 standards of performance for Hg, which included a cap-and-trade program. The supplemental notice also proposed state plan approvability criteria and a model cap-and-trade rule for Hg emissions from coal-fired Utility Units. The Agency received thousands of comments on the proposed rule and supplemental notice.

Comments relating to the central issues concerning today's action are addressed in this preamble. The remainder of our responses are contained in the response to comments document which is in the docket.

We initially estimated that we had over 680,000 submissions from the public on the proposed rule and the supplemental notice, which came primarily in the form of letters and e-mails. A recent review of the electronic docket reveals that our initial estimate was over-stated. The docket reflects approximately 500,000 separate submissions from the public, about 5,000 of which represent unique comments.

The response to comments document relevant to this rule is called: “Response to Significant Public Comments Concerning the Proposed Revision of the December 2000 Appropriate and Necessary Finding and Proposed Removal of Utility Units From the Section 112(c) List.”

D. The December 2004 Notice of Data Availability

On December 1, 2004, EPA published in the

Federal Register

a notice of data availability entitled “Proposed National Emission Standards for Hazardous Air Pollutants; and, in the Alternative, Proposed Standards of Performance for New and Existing Stationary Sources, Electric Utility Steam Generating Units: Notice of Data Availability.”

See

69 FR 69864 (December 1, 2004). EPA issued this notice to seek additional information and input concerning: (1) Certain Hg data and information that the Agency received in response to the proposed rule and supplemental notice, (2) the different forms of Hg that are emitted into the atmosphere from coal-fired Utility Units and how those forms respond to different control technologies; and (3) a revised proposed benefits methodology for assessing the benefits of Hg regulation. The benefits methodology generally involves analyzing Hg emissions from coal-fired Utility Units, conducting deposition modeling based on the identified Hg emissions, and relating that deposition modeling to methylmercury concentrations in fish. EPA conducts benefits analyses for rulemakings consistent with the provisions of Executive Order 12866.

III. EPA's Interpretation of CAA Section 112(n)(1)(A)

As explained above, Congress treated Utility Units differently from other major and area sources and provided EPA considerable discretion in evaluating whether to regulate Utility Units under section 112. Section 112(n)(1)(A) provides, in full:

The Administrator shall perform a study of the

hazards to public health reasonably anticipated to occur as a result of emissions by electric utility steam generating units

of pollutants listed under subsection (b) of this section after imposition of the requirements of this Act. The Administrator shall report the results of this study to the Congress within 3 years after the date of the enactment of the Clean Air Act Amendments of 1990. The Administrator shall develop and describe in the Administrator's report to Congress alternative control strategies for emissions which may warrant regulation under this section. The Administrator shall regulate electric utility steam generating units under this section, if the Administrator finds such regulation is

appropriate and necessary after considering the results

of the study required by this subparagraph.

(Emphasis added.).

The italicized terms in the above paragraph are central terms in section 112(n)(1)(A). Before we address our interpretation of these terms, however, we again summarize the requirements of section 112(n)(1)(A). The first step under section 112(n)(1)(A), which is addressed by the first three sentences of section 112(n)(1)(A), concerns the completion of a study and submission of the results of that study to Congress by November 15, 1993. The study is to examine the hazards to public health from utility HAP emissions that are reasonably anticipated to occur following imposition of the requirements of the CAA and to identify alternative control strategies for those HAP that may warrant regulation under section 112. The second step, which is addressed by the last sentence of section 112(n)(1)(A), requires EPA to determine whether regulation of Utility Units under section 112 is appropriate and necessary considering, among other things, the results of the study. Congress provided no deadline by which this determination must be made.

Section 112(n)(1)(A) itself contains no clear standard to govern EPA's analysis and determination of whether it is “appropriate and necessary” to regulate utilities under section 112. The first sentence of the subparagraph describes the scope of the study EPA was to conduct. The sentence on EPA's “appropriate and necessary” finding then says that the Agency must make that finding after considering the results of the study. But Congress did not supply an actual definition or test for determining whether regulation of utilities under section 112 is “appropriate and necessary.” Thus, EPA must supply a reasonable interpretation of those terms to fill the gap.

Chevron USA Inc.

NRDC

, 467 U.S. 837 (1984).

Congress' direction on the study provides the only guidance in section 112(n)(1)(A) about the substance of EPA's inquiry. Because the statute provides no other explicit guidance, EPA has chosen to extrapolate from Congress' description of the study to adopt a reasonable interpretation of the phrase “appropriate and necessary.” The following sections describe how the Agency has used Congress' guidance on the study to formulate different aspects of our interpretation and application of the “appropriate and necessary” test.

A. Hazards to Public Health Reasonably Anticipated To Occur

In section 112(n)(1)(A), Congress directed EPA to perform a study of “hazards to public health” that would likely result from utility HAP emissions, before making any further decisions about regulating utilities under section 112. Unlike other sections of the CAA, section 112(n)(1)(A) focuses only on hazards to public health. It does not require that EPA study other factors, such as environmental effects without any established pathways to human health effects. In contrast, section 112(n)(1)(B) requires a separate EPA study, although not as a precursor to a regulatory determination, of the “health and environmental effects” of “mercury emissions” from a broad range of sources. Also unlike Section 112(n)(1)(A), many of the other requirements of section 112 explicitly require both an assessment of human health effects and, in addition, an assessment of adverse environmental effects. For example, the Administrator is charged with periodically reviewing the list of Hazardous Air Pollutants and adding pollutants that present a threat of either “adverse human health effects” or “adverse environmental effects.” CAA Section 112(b)(2). The Administrator examines area sources of HAPs to determine if they present “a threat of adverse effects to human health or the environment.” CAA Section 112(c)(3). The Administrator is to prioritize action under section 112(d) after considering “the known or anticipated adverse effects of such pollutants on public health and environment.” CAA Section 112(e)(2)(A). Nor did Congress appear to view the two terms as synonymous. Under section 112(f), the EPA

promulgates emission standards at a level “with an ample margin of safety” to “protect public health.” CAA Section 112(f)(2)(A). The Administrator may go further and impose more stringent standards to protect against “an adverse environmental effect” only after considering “cost, energy, safety, and other relevant factors.”

Id.

As described above, section 112(n)(1)(A) also provides no clear standard for analyzing public health effects—in contrast to, for example, section 112(f). Under section 112(f), the issue is whether additional regulation is needed to “provide an ample margin of safety to protect public health.” Section 112(f) also expressly incorporates EPA's pre-1990 two-part inquiry for evaluating what level of emission reduction is needed to provide an ample margin of safety to protect public health. See CAA section 112(f)(2)(B) (incorporating EPA's two-part ample margin of safety inquiry, set forth at 54 FR 38044 September 14, 1989, which implemented the requirements of section 112 of the 1977 CAA).

By contrast, section 112(n)(1)(A) neither includes the “ample margin of safety to protect public health” requirement, nor does it incorporate EPA's pre-1990 ample margin of safety inquiry.

Section 112 of the 1977 CAA directed EPA to promulgate emission standards “at the level which in * * * [the Administrator's judgment] provides an ample margin of safety to protect the public health.” Congress substantially amended section 112 in 1990 and enacted several new provisions. Congress specifically incorporated the “ample margin of safety to protect public health” requirement into section 112(f), which applies to any source category that is regulated under section 112(d)(2) and (d)(3). Significantly, Congress did not include the “ample margin of safety” language in section 112(n)(1)(A). Instead, Congress directed EPA to assess the “hazards to public health reasonably anticipated to occur” from utility HAP emissions after imposition of the requirements of the CAA, and then determine whether Utility unit emissions should be regulated under section 112 of the CAA.

Because of the focus on “public health” in the section 112(n)(1)(A) study requirement, and because as discussed above Congress did not define the scope of the “appropriate and necessary” finding, EPA is reasonably interpreting section 112(n)(1)(A) to base that finding on an assessment of whether utility HAP emissions likely would result in “hazards to public health.”

Moreover, EPA reasonably interprets section 112(n)(1)(A) not to require the Agency either to study or to base its “appropriate and necessary” finding on an assessment of environmental effects unrelated to public health.

As described above, Section 112(n)(1)(A) requires only that the Administrator “consider” the results of the public health study before determining whether utility regulation is “appropriate and necessary.” This mild direction, when paired with the considerable discretion inherent in any judgment about whether an action is “appropriate and necessary,” has led EPA to conclude that the statute permits the agency to consider other relevant factors when determining whether to regulate emissions from utility units under section 112. This is not to say, however, that EPA believes it may ignore the context of section 112(n) in making its determination.

The Supreme Court has recognized that “where Congress includes particular language in one section of a statute but omits it in another section of the same Act,” as here, where section 112(n)(1)(A) refers to public health and conspicuously omits any reference to adverse environmental effect, “it is generally presumed that Congress acts intentionally * * * in the disparate inclusion or exclusion.”

Russello

United States,

464 U.S. 16, 23 (1983). The only direction that Congress explicitly provided to guide our “appropriate and necessary” finding was that we consider the results of a study of only those “hazards to public health” that the agency “reasonably anticipate[s] to occur.”

EPA must reconcile the broad discretion to determine what is “appropriate and necessary” with the implicit Congressional decision that information about environmental effects unrelated to human health effects was not needed for that determination. Rather than conclude that EPA is prohibited from considering environmental effects, however, EPA interprets section 112(n)(1)(A) to permit the agency to consider other relevant factors as part of its “appropriate and necessary” determination, as refined further below, but these factors may not independently, or in conjunction with one another, justify regulation under section 112(n) when EPA has concluded that hazards to U.S. public health are not reasonably anticipated to occur. Compare CAA section 112(f)(2)(A) (Administrator may set a more stringent standard than is required to protect health if necessary, considering factors such as cost, to prevent an adverse environmental effect).

In evaluating hazards to public health under section 112(n)(1)(A) we look at various factors, including, for example, the affected population, the characteristics of exposure (

e.g.,

level and duration), the nature of the data, including the uncertainties associated with the data, and the nature and degree of health effects. In terms of assessing health effects, we have numerous tools at our disposal. See Section VI.H (for fuller discussion of factors relevant to assessing the hazards to public health). For example, for cancer effects, we can assess the lifetime excess cancer risk, and for other effects, we look to tools, such as the reference dose.

As explained below, the “hazards to public health reasonably anticipated to occur” standard is relevant not only for the Study, but also for the appropriate and necessary determination.

Section VI below discusses the reference dose (“RfD”) in detail.

EPA has also taken note of the context for assessing “hazards to public health,” for the language of section 112(n)(1)(A), calls for an analysis of the “hazards to public health” reasonably anticipated to “occur as a result of emissions by electric utility steam generating units.” (Emphasis added.) Section 110(a)(2)(D) provides an instructive comparison in this regard. In section 110(a)(2)(D), Congress required that each state implementation plan contain adequate provisions “prohibiting * * * any source or other type of emissions activity within the State from emitting any air pollutant in amounts” that will “contribute significantly to nonattainment” of the national ambient air quality standards. This provision demonstrates that Congress knew how to require regulation of emissions of air pollutants even where the pollutants themselves do not cause a problem, but rather only “contribute to a problem.” Unlike section 110(a)(2)(D), in section 112(n)(1)(A), Congress focused exclusively on the “hazards to public health” of HAP emissions “result[ing] from” Utility Units. Rather, it is the EPA study performed pursuant to section 112(n)(1)(B), not the inquiry under section 112(n)(1)(A), that examines all current anthopogenic sources of Hg emissions and their effects on human health and the environment. EPA has concluded that its inquiry under section 112(n)(1)(A) may reasonably focus solely on whether the utility HAP emissions themselves are posing a hazard to public health. This focus on utility emissions only is consistent with Congress' overall decision to provide for separate treatment of utilities in section 112(n)(1)(A).

B. Imposition of the Requirements of This Act

Congress required EPA to examine the hazards to public health from utility emissions “after imposition of the requirements of this Act.” The phrase “imposition of the requirements of th[e] Act” is susceptible to different

interpretations because Congress did not specify the scope of the requirements under the CAA to be considered or, more importantly, the time period over which the imposition of requirements was to be examined. EPA reasonably interprets the phrase “imposition of the requirements of th[e] Act” to include not only those requirements already imposed and in effect, but also those requirements that EPA reasonably anticipates will be implemented and will result in reductions of utility HAP emissions. This interpretation is reasonable in view of the fact that Congress called for the study to be completed within three years of enactment of the 1990 CAA Amendments. At such time, EPA could have only forecast, to the extent possible, how implementation of the requirements of the CAA would impact utility HAP emissions, based on the science and the state of technology at the time.

Although the December 2000 finding does not provide an interpretation of the phrase “after imposition of the requirements of the[e] Act,” the Utility Study, on which that finding was based, does account for the phrase by evaluating utility HAP emission levels in 2010. See Utility Study ES-2 (the “2010 scenario was selected to meet the section 112(n)(1)(A) mandate to evaluate hazards ‘after imposition of the requirements of ’the CAA.”). We do not believe that the December 2000 finding or the January 2004 proposal properly give effect to all of the terms of section 112(n)(1)(A), including the first sentence of section 112(n)(1)(A). We therefore provide our interpretation of the central terms in that sentence above, as those terms are relevant to the final actions we are taking today.

We are interpreting the phrase “requirements of th[e] Act” broadly to include CAA requirements that could either directly or indirectly result in reductions of utility HAP emissions. For example, certain provisions of the CAA that affect Utility Units, such as the requirements of Title I and Title IV, require controls on pollutants like SO

or NO

. Although these pollutants are not HAP, the controls that are required to achieve the needed reductions have the added effect of reducing HAP emissions. Thus, given our interpretation of the phrase “imposition of the requirements of th[e] Act,” we read the first sentence of section 112(n)(1)(A) as calling for a study of the hazards to public health from utility HAP emissions that EPA reasonably anticipates would occur after implementation of the CAA requirements that EPA, at the time of the study, should have reasonably anticipated would be implemented and would directly or indirectly result in reductions of utility HAP emissions.

Finally, it is telling that Congress directed EPA to examine the utility HAP emissions remaining “after imposition of the requirements of th[e] Act,” because there is no other provision in section 112 that calls for EPA to examine the requirements of the CAA in assessing whether to regulate a source category under section 112.

Congress plainly treated Utility Units differently from other source categories, and that special treatment reveals Congress' recognition that Utility Units are a broad, diverse source category that is subject to numerous CAA requirements, including requirements under both Title I and Title IV, and that such sources should not be subject to duplicative or otherwise inefficient regulation.

See 136 Cong. Rec. H12911, 12934 (daily ed. Oct. 26, 1990) (Statement of Congressman Oxley) (stating that the conferees adopted section 112(n)(1)(A) “because of the logic of basing any decision to regulate on the results of scientific study and because of the emission reductions that will be achieved and the extremely high costs that electric utilities will face under other provisions of the new Clean Air Act amendments.”).

Section 112(m)(6) provides an instructive comparison because it requires EPA to examine the other provisions of section 112, and to determine whether those provisions are adequate to prevent serious adverse effects to public health and the environment associated with atmospheric deposition to certain waterbodies. Section 112(m)(6) also requires EPA to promulgate additional regulations setting emission standards or control requirements, “in accordance with” section 112 and under the authority of section 112(m)(6), if EPA determines that the other provisions of section 112 are adequate, and such regulations are appropriate and necessary to prevent serious adverse public health and environmental effects. Section 112(n)(1)(A) provides EPA far greater discretion because under that section, EPA is not only to evaluate the reasonably anticipated public health hazards remaining “after imposition of the requirements of th[e] Act,” but also to determine whether to regulate Utility Units under section 112 of the CAA at all.

As noted elsewhere, section 112(n)(1)(A) was included in the House Committee bill and adopted by the House; while the Senate included a different provision. In the Conference Committee, the House version prevailed. Sen. Durenberger, a Senate conferee and an evident opponent of the provision, alluded to another purpose for the provision, which concerns the fact that “mercury is a global problem.” Legislative History of the Clean Air Act Amendments of 1990, at 872 (Oct. 27, 1990) (statement of Sen. Durenberger). Based on Sen. Durenberger's statement, it appears that one of the reasons for the wide deference Congress accorded EPA under section 112(n)(1)(A) was to allow EPA to account for the fact that Hg emissions from U.S. utilities are a very small part of overall Hg emissions, and therefore that EPA should exercise discretion in considering the uncontrollable amount of risk from Hg that would remain regardless of the extent to which U.S. utilities are controlled.

C. Appropriate and Necessary After Considering the Results of the Study

Section 112(n)(1)(A) requires EPA to make a determination as to whether regulation of Utility Units under section 112 is “appropriate and necessary.” Congress did not define the terms “appropriate” and “necessary,” but provided that regulation of Utility Units under section 112 could occur only if EPA determines that such regulation is both “appropriate” and “necessary.”

1. Considering the Results of the Study

The appropriate and necessary determination is to be made only after “considering the results of the study” required under section 112(n)(1)(A). We interpret the phrase “considering the results of the study” to mean that EPA must consider the results of the study in making its determination, but that EPA is not foreclosed from analyzing other relevant information that becomes available after completion of the study. This interpretation is reasonable because section 112(n)(1)(A) contains no deadline by which EPA must determine whether it is “appropriate and necessary” to regulate Utility Units under section 112.

Moreover, nothing in section 112(n)(1)(A) suggests that EPA is precluded from considering new relevant information obtained after completion of the Utility Study in determining whether regulation of Utility Units under section 112 is appropriate and necessary. Indeed, the term “considering” in section 112(n)(1)(A) is analogous to the terms “based on” or “including,” which are neither limiting nor exclusive terms.

In a recent case, the DC Circuit rejected an argument advanced by the petitioners that an EPA rule was invalid because the statute required EPA to promulgate the regulation “based on the study,” and according to petitioners EPA's rule was not based on a study that met the requirements of the CAA.

Sierra Club

EPA

, 325 F.3d 374 (DC Cir. 2003). In rejecting petitioners' arguments, the Court held, among other things, that “the statute doesn't say that the rule must be based exclusively on the study.”

Sierra Club

EPA

, 325 F.3d at 377 (emphasis in original); See also

United States

United Technologies Corp.

, 985 F.2d 1148, 1158 (2d Cir. 1993) (“based upon” does not mean “solely”);

McDaniel

Chevron Corp.

, 203 F.3d 1099, 1111 (9th Cir. 2000). Consistent with this reasoning, EPA reasonably interprets the phrase “considering the results of the study,” to mean that EPA must consider the study, but that it can consider other relevant information obtained after completion of the study. Congress could not have reasonably intended for EPA to

ignore relevant information concerning HAP emissions from Utility Units solely because that information was obtained after completion of the Utility Study.

In fact, the term “considering,” on its face, is less limiting than the phrase “based on.”

Consistent with this interpretation, in December 2000, EPA relied not only on the Utility Study, but also on certain information concerning Hg obtained after completion of the study, including actual emissions data from coal-fired plants for calendar year 1999 and a report from the National Academy of Sciences on the health effects of methylmercury. See 65 FR 79825-27.

2. Appropriate and Necessary

The condition precedent for regulating Utility Units under section 112 is whether such regulation is “appropriate” and “necessary.” These are two very commonly used terms in the English language, and Congress has not ascribed any particular meaning to these terms in the CAA. The legislative history does not resolve Congress' intent with regard to these terms. We therefore first examine the structure of section 112(n)(1)(A) and then discuss our interpretation of the terms “appropriate” and “necessary.”

a. Examining the Structure of Section 112(n)(1)(A). In interpreting the terms “appropriate” and “necessary” in section 112(n)(1)(A), we begin with the structure of section 112(n)(1)(A). As an initial matter, the order of the terms in the phrase “appropriate and necessary” suggests that the first decision EPA must make is whether regulation of Utility Units under section 112 is “appropriate.” Even if EPA determines that regulation of Utility Units under section 112 is appropriate, it must still determine whether such regulation is also necessary. Were EPA to find, however, that regulation of Utility Units under section 112 met only one prong, then regulating Utility Units under section 112 would not be authorized by the statute.

The structure of section 112(n)(1)(A) also reveals that the appropriate and necessary finding is to be made by reference to the reasonably anticipated public health risks of utility HAP emissions that remain after “imposition of the requirements of th[e] Act.” The first sentence of section 112(n)(1)(A) contains an important direction to EPA, which sets the predicate for the entire provision. That first sentence calls for EPA to identify the hazards to public health reasonably anticipated to occur as a result of the utility HAP emissions remaining “after imposition of the requirements of th[e] Act.” Stated differently, Congress wanted EPA to identify the utility HAP emissions that would remain “after imposition of the requirements of th[e] Act” and identify the hazards to public health reasonably anticipated to occur as the result of such emissions. As noted above, we interpret the phrase “imposition of the requirements of th[e] Act” to include those CAA requirements that EPA should have reasonably anticipated would be implemented and would result in reductions of utility HAP emissions.

Congress' focus on the other requirements of the CAA reflects its recognition that Utility Units are subject to numerous CAA provisions and its intent to avoid duplicative and unnecessary regulation. We therefore reasonably conclude that the appropriate and necessary finding is to be made by reference to the reasonably anticipated public health risks from utility HAP emissions that remain “after imposition of the requirements of th[e] Act.”

The comments of Rep. Oxley, a member of the Conference Committee, about section 112(n)(1)(A) support EPA's interpretation of that provision. Rep. Oxley stated:

Pursuant to section 112(n), the Administrator may regulate fossil fuel fired electric utility steam generating units only if the studies described in section 112(n) clearly establish that emissions of any pollutant, or aggregate of pollutants, from such units cause a significant risk of serious adverse effects on the public health. Thus, if the Administrator regulates any of these units, he may regulate only those units that he determines—

after taking into account compliance with all other provisions of the CAA

and any other federal, state or local regulation and voluntary emission reductions—have been demonstrated to cause a significant threat of adverse effects on public health.

136 Cong. Rec. H12911, 12934 (daily ed. Oct. 26, 1990) (Statement of Rep. Oxley) (emphasis added).

b. EPA's interpretations of the terms “appropriate” and “necessary.” (i) Appropriate. In December 2000, EPA found that it was appropriate to regulate coal- and oil-fired Utility Units under section 112. At that time, we did not provide an interpretation of the term “appropriate.” Instead, we focused on the following facts and circumstances. We first found that it was “appropriate” to regulate coal- and oil-fired Utility Units under section 112 because “mercury in the environment presents significant hazards to public health.”

See

65 FR 79830. We also determined that it was appropriate to regulate oil-fired Utility Units based on the uncertainties “regarding the extent of the public health impact from HAP emissions from” such units.

See

65 FR 79830. Finally, we found that it was appropriate to regulate HAP emissions from coal-and oil-fired units under section 112 because we had identified control options that we anticipated would effectively reduce certain HAP emissions. We also indicated that certain control options could “greatly reduc[e] mercury control costs.”

See

65 FR 79830.

In January 2004, we proposed reversing our “appropriate” finding in large part. Specifically, we proposed that it is not “appropriate” to regulate coal-fired units on the basis of non-Hg HAP and oil-fired units on the basis of non-Ni HAP because the record that was before the Agency in December 2000 indicates that emissions of such pollutants do not result in hazards to public health.

See

Section IV.B.

Webster's dictionary defines the term “appropriate” to mean “especially suitable or compatible.” Miriam-Webster's Online Dictionary, 10th ed. Determining whether something is “especially suitable or compatible” for a particular situation requires consideration of different factors. In section 112(n)(1)(A), Congress requires EPA to determine whether it is “appropriate” to regulate Utility Units under section 112. In making this determination, we begin as we did in December 2000, by assessing the paramount factor, which is whether the level of utility HAP emissions remaining “after imposition of the requirements of th[e] Act” would result in hazards to public health. We determine whether the remaining utility HAP emissions cause hazards to public health by analyzing available health effects data and assessing, among other things, the uncertainties associated with those data, the weight of the scientific evidence, and the extent and nature of the health effects. See Section VI. If the remaining HAP emissions from Utility Units do not result in hazards to public health, EPA does not believe that it would be “especially suitable”—

i.e.

, “appropriate”—to regulate such units under section 112. In this situation, there would be no need to consider any additional factors under the “appropriate” inquiry because the threshold fact critical to making a finding that it is appropriate to regulate Utility Units under section 112 would be missing.

Even if the remaining utility HAP emissions cause hazards to public health, it still may not be appropriate to regulate Utility Units under section 112 because there may be other relevant factors particular to the situation that would lead the Agency to conclude that it is not “especially suitable” or “appropriate” to regulate Utility Units under section 112. For example, it might not be appropriate to regulate the utility HAP emissions remaining “after imposition of the requirements of th[e] Act,” if the controls mandated under section 112(d) would be ineffective at eliminating or reducing the identified hazards to public health. Similarly, it might not be appropriate to regulate the

remaining utility HAP emissions under section 112 if the health benefits expected as the result of such regulation are marginal and the cost of such regulation is significant and therefore substantially outweighs the benefits. These examples illustrate that situation-specific factors, including cost, may affect whether it “is appropriate” to regulate utility HAP emissions under section 112.

(See Section 112(n)(1)(A).)

Nothing precludes EPA from considering costs in assessing whether regulation of Utility Units under section 112 is appropriate in light of all of the facts and circumstances presented. The DC Circuit has indicated that regulatory provisions should be read with a presumption in favor of considering costs: “It is only where there is ‘clear congressional intent to preclude consideration of cost’ that we find agencies barred from considering costs. [Citations omitted.]”

Michigan

EPA

, 213 F.3d 663, 678 (DC Cir. 2000), cert. den., 532 U.S. 903 (2001) (upholding EPA's interpretation of “contribute significantly” under CAA section 110(a)(2)(D) to include a cost component). The Supreme Court's decision in

Whitman

American Trucking Assn's (ATA)

, Inc., 531 U.S. 457 (2001), is not to the contrary. In that case, the Court held that EPA lacked authority to consider costs in the context of setting the national ambient air quality standards under CAA section 109(b)(1), because the “modest words ‘adequate margin’ and ‘requisite’ ' in that section do not “leave room” to consider cost. 531 U.S. 466. By contrast, EPA is not setting emission standards in today's action, but rather determining, as Congress directed, whether it is “appropriate” and “necessary” to regulate Utility Units under CAA section 112. The terms “appropriate” and “necessary” are broad terms, which by contrast to the terms at issue in ATA do, in fact, leave room for consideration of costs in deciding whether to regulate utilities under section 112. Moreover, the legislative history of section 112(n) indicates that Congress intended for EPA to consider costs. See 136 Cong. Rec. H12911, 12934 (daily ed. Oct. 26, 1990) (statement of Rep. Oxley) (“[T]he conference committee produced a utility air toxics provision that will provide ample protection of the public health while avoiding the imposition of excessive and unnecessary costs on residential, industrial and commercial consumers of electricity.”). Finally, section 112(n)(1)(A) requires EPA to consider alternative control strategies, and the focus on such strategies may reasonably be read as further evidence of the relevance of costs.

See, e.g.

, 65 FR 79830 (discussing costs in relation to certain technologies).

It cannot be disputed that Congress under section 112(n)(1)(A) entrusted EPA to exercise judgment by evaluating whether regulation of Utility Units under section 112 is, in fact, “appropriate.” We believe that in exercising that judgment, we have the discretion to examine all relevant facts and circumstances, including any special circumstances that may lead us to determine that regulation of Utility Units under CAA section 112 is not appropriate.

Significantly, in December 2000, we acknowledged that factors other than the hazards to public health resulting from utility HAP emissions should be examined in determining whether regulation of Utility Units is appropriate under section 112. Indeed, after concluding that the Hg emissions from coal-fired Utility Units caused hazards to public health, we proceeded with the appropriate inquiry and examined whether there were any control technologies that could effectively reduce Hg. We also commented on the costs of achieving such reductions.

See, e.g.

, 65 FR 79828, 79830.

(ii) Necessary. Like the “appropriate” finding, the “necessary” finding must be made by reference to the utility HAP emissions remaining after imposition of the requirements of the CAA.

Specifically, we interpret the term “necessary” in section 112(n)(1)(A) to mean that it is necessary to regulate Utility Units under section 112 only if there are no other authorities available under the CAA that would, if implemented, effectively address the remaining HAP emissions from Utility Units. Assessing whether an alternative authority would effectively address the remaining utility HAP emissions would involve not only: (a) An analysis of whether the alternative legal authority, if implemented, would address the identified hazards to public health, which was a concept specifically addressed in December 2000 and in the January 2004 proposal, but also (b) an analysis of whether the alternative legal authority, if implemented, would result in effective regulation, including, for example, its cost-effectiveness and its administrative effectiveness. See

Michigan

EPA

, 213 F.3d, 663, 678 (addressing consideration of costs).

This interpretation of the term “necessary” differs slightly from the interpretation advanced in December 2000 and January 2004. In December 2000 and January 2004, we interpreted the term “necessary” to mean that it is only necessary to regulate Utility Units under section 112 if there are no other authorities under the CAA that would adequately address utility HAP emissions. Several commenters noted that under this interpretation, EPA could never regulate HAP under section 112 if it identified an alternative viable legal authority. In light of these comments and further review of section 112(n)(1)(A), we refined our interpretation of the term “necessary” as noted above. We agree that if we found an alternative authority under the CAA but we also determined that such authority would not effectively address the remaining HAP emissions, we should be able to address those emissions under section 112. Accordingly, we maintain that it is necessary to regulate Utility Units under section 112 only if there are no other authorities under the CAA that, if implemented, would effectively address the remaining HAP emissions from Utility Units.

Some commenters argued that the “appropriate and necessary” finding is a public health threshold finding, not an investigation into whether another provision of the CAA would address HAP emissions from utilities. This argument is without merit, however, because it conflates the terms “appropriate” and “necessary” and renders one term mere surplusage. Congress required EPA to determine whether it was both appropriate and necessary to regulate Utility Units under section 112. EPA agrees that it must evaluate the hazards to public health associated with HAP from utilities in terms of assessing whether regulation under section 112 is “appropriate.” But Congress meant something different by the term “necessary,” and EPA's interpretation of that term is reasonable. Moreover, we believe that the emissions inquiry envisioned under the first sentence of section 112(n)(1)(A) is distinct from the “necessary” inquiry called for by the last sentence of section 112(n)(1)(A), because under the “necessary” inquiry the issue is not whether EPA reasonably anticipated that a particular provision of the CAA will be implemented and will reduce HAP emissions, but rather whether there are any other authorities in the CAA that could be implemented, and if implemented, could effectively address the hazards to public health that result from the remaining HAP emissions.

Other commenters argued that EPA cannot consider other statutory authorities under the “necessary” prong of the “appropriate and necessary” inquiry because those authorities do not provide for regulation of utility HAP according to the provisions of CAA section 112(d) and (f). This argument is also without merit because it again renders mere surplusage the “necessary” prong of the determination. Moreover, as explained above, Congress did not incorporate the requirements of section 112(f) into section 112(n)(1)(A), but instead, as we interpret section 112(n)(1)(A), called on EPA to consider the “hazards to public health reasonably anticipated to occur” from utility HAP emissions after imposition of the requirements of the CAA, in determining whether it is both appropriate and necessary to regulate Utility Units under section 112.

3. The Timing and Nature of the “Appropriate and Necessary” Determination

Congress set no deadline in section 112(n)(1)(A) by which EPA must determine whether regulation of Utility Units is appropriate and necessary. We believe that Congress provided

sufficient discretion under section 112(n)(1)(A)—in terms of both the substance and the timing of the appropriate and necessary finding—that nothing precludes us from revising our appropriate and necessary finding if we determine either that the finding was in error based on information before the Agency at the time of the finding, or that the finding is incorrect given new information concerning utility HAP emissions obtained after issuance of the finding. Both of these situations are present here, as explained in section IV below.

Moreover, EPA reasonably interprets the last sentence of section 112(n)(1)(A) as authorizing EPA to issue separate appropriate and necessary findings for different subcategories of “electric utility steam generating units.” EPA typically subcategorizes large source categories such as utilities. This is especially true for Utility Units because the nature of the fuel used in different units (

e.g.,

coal-, oil-, or gas-fired Utility Units), affects the type and amount of HAP emitted from the units, which, in turn, affects the issue of whether hazards to public health may exist from such emissions.

Even where section 112(n)(1)(A) read to require EPA to make only one appropriate and necessary finding for all “electric utility steam generating units,” EPA's conclusions, as described below, would remain the same.

We received no adverse comments concerning our subcategorization of Utility Units for purposes of section 112(n)(1)(A).

IV. Revision of the December 2000 Appropriate and Necessary Finding

In Section II above, we summarize the December 2000 appropriate and necessary finding for coal- and oil-fired Utility Units. In this section, we explain why we now believe that the December 2000 finding lacked foundation and therefore was erroneous. We also address below certain new information obtained since the finding that confirms that it is not appropriate and necessary to regulate coal- and oil-fired Utility Units under section 112. Our discussion below is divided into two sections, the first of which concerns the December 2000 finding for coal-fired units, and the second of which addresses the December 2000 finding for oil-fired units.

A. Revision of the December 2000 Appropriate and Necessary Finding for Coal-fired Units

The majority of the December 2000 finding concerned Hg emissions from coal-fired Utility Units.

See, e.g.

, 65 FR 79826 (“mercury * * * is emitted from coal-fired units, and * * * is the HAP of greatest concern to public health from the industry.”); 65 FR 79829-30 (conclusions section of December 2000 finding focuses almost exclusively on Hg); Utility Study, ES-27 (“mercury from coal-fired utilities is the HAP of greatest potential concern.”). For that reason, we first address how EPA erred in making the appropriate and necessary finding for coal-fired units based on Hg emissions. We then discuss the December 2000 finding for coal-fired units with regard to non-Hg HAP.

1. It Is Not Appropriate and Necessary To Regulate Coal-Fired Units on the Basis of Hg Emissions

a. It Is Not Appropriate to Regulate Coal-fired Units on the Basis of Hg Emissions. As noted above, EPA's December 2000 “appropriate” finding is framed primarily in terms of health effects resulting from Hg emissions from coal-fired Utility Units.

See

65 FR 79829. The December 2000 finding also discusses environmental effects, primarily in the context of public health. In particular, the appropriate finding discusses the effects of Hg on fish because the public's primary route of exposure to Hg is through consumption of fish containing methylmercury.

See

65 FR 79829-30.

See also

Section VI (discussing health effects of Hg). The December 2000 finding also discusses briefly the effects of methymercury on certain fish-eating wildlife, such as racoons and loons. See 65 FR 79830.

The “appropriate” rationale set forth in the December 2000 finding focused exclusively on Hg with regard to coal-fired Utility Units. The December 2000 “necessary” finding can be read, however, to suggest that under the appropriate prong, EPA also determined that non-Hg from coal-fired Utility Units resulted in hazards to public health. See 65 FR 79830 (“

It is necessary to regulate HAP emissions from coal- and oil-fired

” Utility Units under section 112 “because the implementation of other requirements of the CAA will not address the serious public health and environmental hazards arising from such emissions.”). As explained below in section IV.B, the record that was before the Agency in December 2000 confirms that the non-Hg HAP emissions remaining “after imposition of the requirements of th[e] Act” do not result in hazards to public health. In the proposed rule, EPA solicited comment on this issue. We did not receive any new information concerning non-Hg HAP during the comment period that would cause us to change our position as to these HAP.

As explained above, EPA interprets section 112(n)(1)(A) as not requiring the Agency to consider environmental effects of utility HAP emissions that are unrelated to public health. Nevertheless, EPA believes it has authority under the “appropriate” inquiry to consider other factors, including non-public health related environmental factors. As explained above, however, given the focus in section 112(n)(1)(A) on hazards to public health, we believe that environmental factors unrelated to public health, although they can be considered in the appropriate inquiry, may not independently or, in conjunction with one another, justify regulation of Utility Units under section 112 when EPA has concluded that hazards to public health are not reasonably anticipated to result from utility HAP emissions.

EPA reasonably addressed non-public health related environmental factors, such as exposure to wildlife, in the December 2000 finding, because we separately concluded that Hg emissions from coal-fired Utility Units pose hazards to public health. As explained below, we believe that our December 2000 appropriate finding lacks foundation, and that conclusion is supported by certain recent information. Specifically, we conclude today that the level of Hg emissions remaining after imposition of the requirements of the Act will not cause hazards to public health, and therefore we need not consider other factors, such as non-public health related environmental effects. We do, of course, discuss the effects of Hg on fish, because the ingestion of fish contaminated with methylmercury is the public's primary route of exposure to Hg. See Section VI (discussing health effects of Hg).

We note, however, that as part of our overall inquiry into the effects of Hg emissions, we assessed the available information on the environmental effects of Hg emissions, including effects that appear to be unrelated to public health. See 1997 Mercury Report to Congress. While that information, in a very general sense, suggests that environmental effects of Hg emissions (unrelated to public health) may be of some concern and therefore warrant further study, the available information is not specific to the effects of Hg emissions from domestic utilities. See RIA Appendix C. Thus, even if EPA were either required or permitted to give unlimited consideration to these non-health-related environmental effects of utility Hg emissions in making the regulatory determination under section 112(n)(1)(A), we would conclude that there is insufficient causal information to conclusively link utility emissions to deleterious effects (in wildlife) from Hg exposure.

As noted above, EPA's December 2000 appropriate finding for coal-fired units hinged primarily on the health and environmental effects resulting from Hg emissions.

See

65 FR 79830 (“mercury in the environment presents significant hazards to public health and the environment.”). This finding lacks foundation, however, for the reasons described below.

(i) The December 2000 Appropriate Finding Is Overbroad To The Extent It Hinged On Environmental Effects. EPA should not have made its appropriate

finding because of “hazards to * * * the environment” resulting from Hg emissions from coal-fired Utility Units. Section 112(n)(1)(A) requires EPA to analyze only the “hazards to public health” resulting from utility HAP emissions, not the environmental effects caused by such emissions. Under section 112(n)(1)(A), the condition precedent for regulation under section 112 is public health hazards, not environmental effects, which Congress included in other provisions of section 112.

See, e.g.

, 112(c)(3) (“a threat of adverse effect to human health or the environment.”). The Supreme Court has recognized that “where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally * * * in the disparate inclusion or exclusion.”

Russello

United States,

464 U.S. 16, 23 (1983). Accordingly, EPA erred in its December 2000 “appropriate” finding to the extent that it hinged on the environmental effects of HAP, including Hg.

(ii) The December 2000 Appropriate Finding Lacks Foundation Because EPA Did Not Fully Consider The Hg Reductions That Would Result From “Imposition of the Requirements of th[e] Act.” As explained above, EPA interprets section 112(n)(1)(A) as providing that the “appropriate” finding should be made by reference to the level of HAP emissions remaining after “imposition of the requirements of th[e] Act.” We reasonably interpret the phrase “imposition of the requirements of th[e] Act” to include those requirements that EPA should have reasonably anticipated would be implemented and would result in reductions of utility HAP emissions.

The December 2000 “appropriate” finding lacks foundation because EPA failed to fully account for the Hg emissions remaining after “imposition of the requirements of th[e] Act.”

That failure resulted in an overestimate of the remaining utility Hg emissions, which is the level of emissions that we considered in making our December 2000 appropriate finding. Had we properly considered the Hg reductions remaining “after imposition of the requirements of th[e] Act” in December 2000, we might well have (and, as discussed below, now believe should have) reached a different conclusion as to whether it was “appropriate” to regulate coal-fired units on the basis of Hg emissions.

For ease of reference, we refer to the level of utility Hg emissions remaining “after imposition of the requirements” of the CAA as the “remaining Hg emissions.”

We begin our analysis with a brief background concerning the Utility Study. In an attempt to address the requirement in section 112(n)(1)(A) of evaluating utility emissions “after imposition of the requirements of th[e] Act”, the Utility Study estimates utility HAP emissions as of the year 2010. See Utility Study ES-1. In quantifying 2010 utility HAP emissions, our analysis focused almost exclusively on the acid rain provisions of Title IV. Title IV of the CAA establishes a national, annual emissions cap for sulfur dioxide (SO

) emissions from Utility Units, which is to be implemented in two phases. Phase I commences January 1, 1995, and Phase II on January 1, 2000.

EPA relied in the Utility Study on a 1997 Department of Energy report concerning the effects of the implementation of Title IV of the CAA on utilities. Utility Study 2-31 to 2-33, 2-39. That report provides that 53 percent of Utility Units subject to Phase 1 requirements switched to a lower-sulfur coal, 27 percent purchased additional emissions allowances, and 16 percent (

i.e.,

27 Utility Units) installed flue gas scrubbers to comply with the Phase I requirements.

In the 2010 utility HAP emissions analysis, EPA accounted for the 27 Utility Units that installed scrubbers to comply with the phase I requirements. Utility Study 2-31. EPA accounted for these scrubbers in the 2010 analysis because it recognized that scrubbers, which control SO

, achieve HAP reductions, including Hg.

Utility Study at ES-19 & 25, 1-2, 2-32, 3-14 (discussing ability of PM controls (including SO

controls) to reduce Hg and other HAP emissions from Utility Units).

Significantly, however, EPA did not incorporate into the 2010 utility HAP emissions analysis the Hg reductions that we reasonably should have anticipated achieving through implementation of the requirements of Title I of the CAA. See Utility Study, at 2-31 to 2-33. In this regard, EPA erred in, at least, two respects.

Flue gas scrubbers are a type of control technology used to control SO

EPA did not account in its 2010 analysis for the installation of any scrubbers associated with Phase II of the acid rain program, because it only had industry projections as to which units would install scrubbers and, for various reasons, it did not find those projections reliable. Utility Study 2-31 to 2-33.

In the December 2000 finding, we indicate that recent data show that technologies used to control criteria pollutants, like PM, SO

, and NO

are not “effective” in controlling Hg. See 65 FR 79828. This statement is incorrect. It is not only inconsistent with other statements in the December 2000 finding, it is contrary to the record that was before the Agency in December 2000. The record indicates that technologies used to control PM, SO

, and NO

do reduce HAP, including Hg. Furthermore, insofar as Hg is concerned, these technologies result in important reductions of oxidized Hg, which is the type of Hg that tends to deposit locally and regionally. Utility Study at ES-19 & 25, 1-2, 2-32, 3-14.

First, EPA erred by not accounting for the utility Hg reductions that it should have reasonably anticipated would result from implementation of the nonattainment provisions of Title I, including, in particular, the revised NAAQS for ozone that EPA issued in July 1997, before the report was completed, under the nonattainment provisions.

The Utility Study expressly recognizes that the revised NAAQS would result in, among other things, significant reductions of SO

and NO

. See generally Utility Study at 1-2 to 1-3. The Utility Study also indicates that the revised NAAQS would result in approximately a 16 percent reduction (11 tons per year) of Hg emissions by 2010, primarily due to the fact that Utility Units would need to install controls, like scrubbers, to meet the SO

reductions needed to attain the PM NAAQS. (Utility Study 1-3, ES-25, 3-14). Notwithstanding these significant estimated reductions, EPA did not take these reductions into account in its 2010 utility HAP emissions analysis.

ES-25 (“analyses performed to assess compliance with the revised NAAQS * * * indicate that Hg emissions in 2010 may be reduced by approximately 16 percent (11 tpy)

over those projected in this report.

”). Accordingly, the December 2000 appropriate finding lacks foundation because we made the finding based on an inaccurate level of Hg emissions remaining after imposition of the requirements of the CAA. Had we properly accounted in December 2000 for the 11 tons per year of Hg reductions that we projected in our own analyses, we might well have (and, as discussed below, now believe should have) concluded that it was not appropriate to regulate coal-fired units under section

112 on the basis of the remaining Hg emissions. Indeed, recent modeling confirms that we likely would have reached such a conclusion. That modeling specifically demonstrates that about a 13 ton reduction in utility Hg emissions from 1990 levels would result in a level of Hg emissions that does not cause hazards to public health. We conducted these recent analyses in conjunction with the recently signed Clean Air Interstate Rule (“CAIR”) issued pursuant to CAA section 110(a)(2)(D), which is explained more fully in section V below.

For additional background concerning the nonattainment provisions of Title I and the revised PM and ozone NAAQS, see Section V below.

In the Utility Study, we explained that we did not account for the identified Hg reductions in the 2010 analysis because we lacked information on the specific number of units that would install scrubbers and related PM control technologies since we had not yet designated which areas of the country were in nonattainment of the revised NAAQS. See Utility Study 2-32. Although we had not yet designated areas of the country as being in nonattainment of the revised standards, as explained in section V, we were generally aware of the likelihood of widespread nonattainment with the revised NAAQS. In fact, that recognition formed the basis of our analysis that resulted in an estimated 16 percent reduction in Hg emissions from implementation of the revised NAAQS.

Second, EPA erred in December 2000 by not examining, and therefore not accounting for, the reductions in utility Hg emissions that would result from two other rules issued pursuant to Title I of the CAA. The first rule set new source performance standards (“NSPS”) under CAA section 111(b) for NO

emitted from utility and industrial boilers. The second rule, promulgated under CAA section 110(a)(2)(D), requires 22 states and the District of Columbia to revise their state implementation plans (“SIP”) to mitigate for the interstate transport of ozone. This rule is called the NO

SIP-call rule and requires significant reductions of NO

emissions in the eastern half of the United States. EPA determined those NO

reductions by analyzing Utility Units and large nonpoint utility sources and identifying the amount of reductions that those units could achieve in a “highly cost-effective” manner. Both the NO

SIP call and the NSPS rule were premised on a NO

control technology called selective catalytic reduction (“SCR”). The data on the effectiveness of SCR at controlling utility Hg emissions was limited in February 1998. See Utility Study 2-32. As of December 2000, however, EPA had additional data that confirmed that SCR would lead to certain reductions in utility Hg emissions.

See, e.g.,

65 FR 79829 (SCR—a NO

control technology “may also oxidize mercury and therefore enhance mercury control.”). EPA therefore should have been able to reasonably estimate in December 2000 that some Hg reductions would occur as the result of implementation of the NSPS and the NO

SIP-call rules. Because we did not account for reductions in utility Hg emissions as the result of implementation of these rules, we made our appropriate finding in December 2000 based on an incorrect estimate of the remaining Hg utility emissions. Based on all of the above, the December 2000 “appropriate” finding lacked foundation because it was not based on the level of utility Hg emissions remaining “after imposition of the requirements of th[e] Act.”

(iii) It Is Not Appropriate to Regulate Coal-fired Utility Units Under Section 112 on the Basis of Hg Emissions Because New Information Reveals that the Level of Utility Hg Emissions Remaining After Imposition of the Requirements of the CAA Does Not Cause Hazards to Public Health. In addition to the errors noted above with regard to the December 2000 finding, we have new information that confirms that it is not appropriate to regulate coal-fired units under section 112 on the basis of Hg emissions. EPA recently signed a rulemaking implementing section 110(a)(2)(D), called the Clean Air Interstate Rule. (See Section V below for further discussion of CAIR.) This rulemaking, among other things, requires a number of eastern states to develop SIPs providing for substantial reductions of SO

and NO

emissions. Although affected states retain flexibility to decide how to achieve those reductions, EPA has concluded that the reductions from Utility Units are highly cost-effective, and anticipates that affected states will meet their emission reduction obligations by controlling Utility Unit emissions. EPA also concluded that the technologies that most cost-effectively achieve SO

and NO

reductions for Utility Units are scrubbers for SO

and SCR for NO

. These technologies, as noted above, result in reductions of utility Hg emissions. In conjunction with the CAIR rulemaking, EPA analyzed the nature of Hg emissions that would remain after implementation of the rule and assumed that states would choose to regulate Utility Units, which is the most cost-effective option for achieving the required reductions. That modeling reveals that the implementation of section 110(a)(2)(D), through CAIR, would result in a level of Hg emissions from Utility Units that would not cause hazards to public health. See Section V for further detail. Because this new information demonstrates that the level of Hg emissions projected to remain “after imposition of” section 110(a)(2)(D) does not cause hazards to public health, we conclude that it is not appropriate to regulate coal-fired Utility Units under section 112 on the basis of Hg emissions.

The reductions achieved through CAIR overlap, in part, with the 11 tons per year of reductions discussed in the prior section, which EPA estimated in 1998 would occur as the result of implementation of the revised NAAQS. The reductions necessarily overlap because in the Utility Study EPA projected forward 13 years, by examining utility HAP emissions in 2010. In analyzing the level of utility Hg emissions remaining “after imposition of [section 110(a)(2)(D)]” through CAIR, we are accounting for the full impact of CAIR and that necessarily includes reductions that occur between today and 2010, and beyond. See Section V (discussing requirements of CAIR in 2010 and 2015).

In addition to CAIR, we today finalized a rule pursuant to section 111, called the Clean Air Mercury Rule (“CAMR”). (See section VII below for further discussion of CAMR.) That rule requires even greater reductions in Hg emissions from coal-fired Utility Units than CAIR. As explained in greater detail in Section VI, the computer modeling completed in support of that rule, like the modeling completed on CAIR, demonstrates that CAMR, independent of CAIR, will result in levels of utility Hg emissions that do not result in hazards to public health. Thus, the implementation of CAMR provides an independent basis for our conclusion that it is not appropriate to regulate coal-fired Utility Units under section 112 because the utility Hg emissions remaining after implementation of section 111 will be at a level that results in no hazards to public health.

Nothing in section 112(n)(1)(A) precludes EPA from revising a prior appropriate and necessary finding based on new information. In light of CAIR and, independently, CAMR, we can now reasonably anticipate the reductions in utility Hg emissions that would result from implementation of sections 110(a)(2)(D) and 111 of the CAA. Accordingly, we are accounting for those reductions in assessing the level of utility Hg emissions remaining after “imposition of the requirements of th[e] Act,” which include section 110(a)(2)(D) and 111. We then based our new appropriate finding on these remaining Hg emissions.

b. It Is Not Necessary to Regulate Coal-fired Units on the Basis of Hg Emissions. Even if Congress had intended EPA to focus on a more limited set of requirements in interpreting the phrase “after imposition of the requirements of th[e] Act,” that would mean only that EPA did not err in December 2000 in terms of its “appropriate” finding for coal-fired units based on Hg emissions. EPA nevertheless concludes today that it still erred in December 2000 with regard to its “necessary” finding. In section 112(n)(1)(A), Congress called on EPA to make a finding as to whether regulation of Utility Units under section 112 was not only “appropriate,” but “necessary.” To give effect to the term “necessary,” we interpret the “necessary” prong of the section 112(n)(1)(A) inquiry to require EPA to examine whether there are any other available authorities under the CAA that, if implemented, would effectively address the remaining Hg emissions from coal-fired Utility Units.

In December 2000, EPA did not consider CAA sections 110(a)(2)(D)

and 111,

which are viable alternative authorities under the CAA, that, if implemented, would effectively address the remaining utility Hg emissions. See Section VI below. Regulation under these authorities would effectively address the remaining utility Hg emissions for two primary reasons. First, as demonstrated in section VI below, the level of utility Hg emissions remaining after implementation of CAIR will not result in hazards to public health. Similarly, as shown in section VI below, the CAMR, which requires even greater Hg reductions than CAIR, will, once implemented, result in a level of utility Hg emissions that does not cause hazards to public health.

In January 2004, the proposed section 111 rule was premised, in part, on the reductions in Hg emissions that EPA anticipated would be achieved through CAIR. In response to comments received on the CAMR, we conducted additional modeling that confirmed that CAIR alone, once implemented, would result in levels of utility Hg emissions that do not cause hazards to public health. (See Section VI below). Accordingly, we now believe that CAA section 110()(2)(D) constitutes yet another viable authority under the CAA that, once implemented, will effectively address the remaining utility Hg emissions.

In the Utility Study, we considered section 111 of the CAA, noting that “new source performance standards currently provide the major regulatory authority for the control of air emissions from utilities.” Utility Study 1-6. We recognized that we had issued NSPS for PM for Utility Units and we noted that such requirements would result indirectly in the control of certain HAP, including Hg. EPA did not, however, address in the Utility Study the question of whether HAP from utilities could be regulated under the authority of section 111 [Utility Study 1-5-6]. As explained in the proposed rule, we conducted a thorough re-evaluation of the provisions of the CAA and have concluded that section 111 provides authority to regulate HAP from new and existing Utility Units. See Section VII below (discussing legal authority under section 111).

In addition, controlling Hg emissions through a cap-and-trade system—whether that control is through direct regulation under section 111 or indirect regulation under section 110(a)(2)(D)—is an efficient means of regulating Utility Units. See CAMR final rule (signed on March 15, 2005) (discussing basis and purpose of the regulations). As an initial matter, a cap-and-trade system, as opposed to the control regime imposed pursuant to section 112(d), provides Utility Units the flexibility to pursue a least-cost compliance option to achieve the required emissions reductions.

Sources have the choice of complying with the reductions in a variety of ways, such as fuel switching, installing different pollution control technologies, installing new or emerging control technologies and/or buying allowances to emit from another source that has controlled its emissions to a level below what the regulation requires. This compliance flexibility allows Utility Units to respond to changing electricity generation demands, economic market conditions or unanticipated weather situations (

e.g.

, extremely hot or cold periods) without jeopardizing their compliance status, or the stability of the overall cap. In addition, the certainty provided by the emissions cap and the timeline for declining emissions provide important information for industry to make strategic, long-range business decisions.

Moreover, under a cap-and-trade approach, most of the reductions are projected to result from larger units installing controls and selling excess allowances, due to economies of scale realized on the larger units versus the smaller units. Indeed, EPA's modeling of trading programs demonstrates that large coal-fired Utility Units, which tend to have higher levels of Hg emissions, will achieve the most cost-effective emission reductions. These units are more likely to over-control their emissions and sell allowances, than to not control and purchase allowances. This model prediction is consistent with principles of capital investment in the utility industry. Under a trading system where the firm's access to capital is limited, where the up-front capital costs of control equipment are significant, and where emission-removal effectiveness (measured in percentage of removal) is unrelated to plant size, from an economics standpoint, the utility company is more likely to allocate pollution-prevention capital to its larger facilities than to the smaller plants (since more allowances will be earned from the larger facilities). Economies of scale of pollution control investment will also favor investment at the larger plants. Further, insofar as large coal-fired Utility Units tend to be newer and/or better maintained than medium-sized and small facilities, it can be expected that companies will favor investments in plants with a longer expected lifetime. These modeled predictions are consistent with the pattern of behavior that EPA has observed over the past decade through implementation of the SO

emissions trading program under Title IV of the CAA. Thus, under a cap-and-trade program, Hg reductions result from units that are most cost effective to control, which enables those units that are not considered to have cost effective control alternatives to use other mechanisms for compliance, such as buying allowances. By contrast, regulating pursuant to a control regime like section 112(d) does not result in the cost efficiencies that are attendant a cap-and-trade program. For example, under section 112(d), each facility must meet a specific level of emission control, which can result in increased compliance costs, particularly for the smaller Utility Units given economies of scale.

Finally, trading provides greater incentives for the development and adoption of new technologies, which could lead to a greater level of emissions control. See generally 69 FR 4686-87. An additional benefit of the cap-and-trade programs under sections 110(a)(2)(D) and 111 is that they dovetail well with each other. In particular, the coordinated regulation of SO

, NO

, and Hg through CAIR and CAMR improves the cost effective manner of regulation because the reductions are being achieved simultaneously using in some cases the same technology to control more than one pollutant. In addition, the cap-and-trade programs under sections 110(a)(2)(D) complement other cap-and-trade programs that directly affect Utility Units, such as the NO

SIP-call final rule and the regulations implementing Title IV, which only further enhances the efficiencies of emission control from such units.

In light of CAA sections 110(a)(2)(D) and 111, we believe that we should not have concluded in December 2000 that it “is necessary” to regulate Utility Units under section 112 and therefore our “necessary” finding was in error. Moreover, even setting aside the error that we made in December 2000, we now recognize the availability of these other statutory provisions and we further conclude today that it is not necessary to regulate coal-fired Utility Units under section 112 on the basis of the remaining Hg emissions. CAA section 110(a)(2)(D), as implemented through CAIR, and independently section 111, as implemented through CAMR, will effectively address the Hg emissions remaining from coal-fired Utility Units “after imposition of the requirements of th[e] Act.”

In sections V and VII below, we address sections 110(a)(2)(D) and 111 and provide a thorough discussion of the legal authority under each provision. We also explain in Section VI that after implementation of CAIR, and independently, CAMR, we do not anticipate hazards to public health resulting from Hg emissions from coal-fired Utility Units.

2. It Is Not Appropriate and Necessary to Regulate Coal-Fired Units on the Basis of Non-Hg Emissions

In the study required by section 112(n)(1)(A), and detailed in the Utility Study, EPA identified 67 HAP as potentially being emitted by Utility Units. (Utility Study, ES-4). Based on a screening assessment designed to prioritize HAP for further evaluation, EPA identified 14 HAP as a priority for further evaluation. (Id.). Of the 14 HAP identified for further evaluation, 12 HAP (arsenic, beryllium, cadmium, chromium, manganese, nickel, hydrogen chloride, hydrogen fluoride, acrolein, dioxins, formaldehyde and radionuclides) were identified for further study based on potential for inhalation exposure and risks. (Utility Study, ES-6). Four of those 12 HAP (arsenic, cadmium, dioxins and radionuclides) plus Hg and lead were considered priority for multipathway exposure. (

.). Of those six HAP, four (arsenic, Hg, dioxins and radionuclides) were identified as the highest priority to assess for multipathway exposure and risks. (Utility Study, ES-6, 7). The other 53 HAP were not evaluated beyond the screening assessment. (Utility Study, ES-7).

In evaluating the potential for inhalation exposure and risks for the 12 HAP identified through the screening assessment as priority for that purpose, EPA estimated the high-end inhalation cancer risk for each HAP identified as a carcinogen and the high-end inhalation noncancer risks for the remaining HAP for both coal- and oil-fired Utility Units in 2010. (Utility Study, 6-16, tables 6-8 and 6-9). That evaluation indicated that there was no maximum individual risk (MIR) for cancer greater than 1 × 10

-6

for beryllium, cadmium, dioxin and nickel emissions from coal-fired Utility Units and for beryllium, cadmium and dioxin emissions from oil-fired Utility Units. (

Id.

) With regard to dioxins, the Utility Study specifically concluded that the quantitative exposure and risk results did not conclusively demonstrate the existence of health risks of concern associated with inhalation exposures to utility emissions on a national scale or from any actual individual utility. (Utility Study, 11-5). The Utility Study thus indicates that inhalation of beryllium, cadmium and dioxin emissions from coal and oil-fired Utility Units and emissions of nickel from oil-fired Utility Units are not of significant concern from a public health standpoint because such exposure does not present a maximum individual risk (MIR) for cancer greater than 1 × 10

-6

. With regard to lead emissions, EPA found that emission quantities and inhalation risks were relatively low and, therefore, decided not to conduct future evaluations of multipathway exposures to lead resulting from Utility Unit emissions. (Utility Study, ES-24). For arsenic, EPA concluded that there were several uncertainties associated with both the cancer risk estimates and the health effects data such that further analyses were needed to characterize the inhalation risks posed by arsenic emissions from Utility Units. (Utility Study, ES-21). The inhalation exposure assessment did not identify any exceedances of the health benchmarks (

e.g.

, RfCs) for hydrogen chloride or hydrogen fluoride, thus indicating that Utility Unit emissions of those HAP did not pose a significant public health concern. (Utility Study chapters 6 and 9.)

a. It Is Not Appropriate to Regulate Coal-fired Units on the Basis of Non-mercury HAP Emissions. The EPA erred in the December 2000 Regulatory Determination to the extent that its “appropriate” finding for coal-fired Utility Units was based, in any way, on hazards to public health or the environment arising from emissions of non-mercury HAP from coal-fired Utility Units. Based on the information before it at the time, EPA could not have reasonably concluded that coal-fired Utility Unit non-mercury HAP emissions presented a hazard to public health. In addition, as stated above, EPA should not have considered environmental effects in the December 2000 Regulatory Determination's consideration of whether it was appropriate to regulate HAP emissions from coal-fired Utility Units under section 112.

(i) Non-Mercury Metallic HAP. In the December 2000 Regulatory Determination, EPA indicated that there were a few metallic HAP (

e.g.

, chromium and cadmium) which were of potential concern for carcinogenic effects, but stated that “the results of the risk assessment (performed in conjunction with the Utility Study) indicate that cancer risks are not high”. (

See

65 FR 79825, 79827.) The EPA acknowledged, however, that the cancer risks were not low enough to eliminate those metals as a potential concern for public health (

.). This latter statement, at least as it pertains to cadmium, is at odds with the results of the risk assessment set forth in the Utility Study and discussed above. In the Utility Study, EPA determined that there was no maximum individual risk (MIR) for cancer greater than 1 × 10

-6

due to inhalation of cadmium emissions from Utility Units. In the Proposed Rule, EPA stated that although it recognized the existence of uncertainties with regard to the data and information obtained prior to the December 2000 Regulatory Determination regarding potential hazards to public health resulting from Utility Unit emissions of non-mercury metallic HAP, the Agency believed that the uncertainties associated with those emissions were so great that it was not appropriate to regulate them at that time because they do not pose a hazard to public health that warrants regulation. (69 FR 4652, 4688, January 30, 2004). The EPA continues to believe that had it properly accounted for the uncertainties regarding the data and information on potential hazards to public health resulting from Utility Unit emissions of non-mercury metallic HAP in making the December 2000 appropriate finding it would have concluded that it was not appropriate to regulate such emissions because they do not cause a hazard to public health. The EPA has not discovered any new information on hazards to public health arising from such emissions that invalidates this conclusion, either through its own efforts or in response to the Proposed Rule.

(ii) Dioxins. In the December 2000 Regulatory Determination, EPA also identified dioxins as being of potential concern and indicated that they may be evaluated further during the regulatory development process. (

See

65 FR 79825, 79827.) The EPA did not, however, indicate that those concerns rose to a level that warranted regulation of dioxins. Thus, EPA did not conclude, and could not have concluded, based on the record before it at the time of the December 2000 Regulatory Determination that it was appropriate to regulate coal-fired Utility Unit HAP emissions under section 112 of the CAA on the basis of dioxin emissions. In the Proposed Rule EPA stated that while it intended to continue to study dioxins in the future, the Utility Study and the information EPA had obtained since finalizing the Utility Study revealed no public health hazards reasonably anticipated to occur as a result of emissions of dioxins by Utility Units. (

See

69 FR 4652, 4688). As is the case with non-mercury metallic HAP, EPA has neither discovered information on hazards to public health arising from Utility Unit emissions of dioxins based on its own efforts, nor received such information in response to the Proposed Rule. The EPA therefore concludes that its appropriate finding in December 2000 lacked foundation because it could not have reasonably concluded that the

level of remaining utility dioxin emissions results in hazards to public health.

(iii) Acid Gases. In the December 2000 Regulatory Determination, EPA identified emissions of hydrogen chloride and hydrogen fluoride as being of potential concern and indicated that such emissions may be evaluated further during the regulatory development process. (See 65 FR 79825, 79827.) The EPA did not, however, indicate that it believed that it was appropriate to regulate such emissions, under section 112 or otherwise. As indicated in the Proposed Rule, EPA did in fact further evaluate Utility Unit emissions of hydrogen chloride and hydrogen fluoride. (See 69 FR 4652, 4688, fn. 10; “Modeling results for hydrogen chloride, hydrogen fluoride and chlorine emissions from coal-fired utility boilers”, December 12, 2003, OAR-2002-0056-0015). That modeling indicates that individuals are not exposed to acid gas emissions from Utility Units at concentrations which pose hazards to public health. EPA has neither discovered information on hazards to public health arising from Utility Unit emissions of acid gases based on its own efforts, nor received such information in response to the Proposed Rule. EPA therefore concludes that its appropriate finding in December 2000 lacked foundation because the level of remaining utility acid gas emissions does not result in hazards to public health.

For the reasons stated above, EPA finds that it could not reasonably have concluded that it was appropriate to regulate coal-fired Utility Units under section 112 due to emissions of non-mercury HAP based on the record before it at the time of the December 2000 Regulatory Determination. The EPA further finds that it has not itself discovered any information which would support the conclusion that it is appropriate to regulate non-mercury HAP emissions by coal-fired Utility Units under section 112 subsequent to the December 2000 Regulatory Determination, nor has it received any such information in response to the January 2004 Proposed Rule, the March 2004 Supplemental Notice or the December 2004 Notice of Data Availability. Further, EPA has concluded that it did not, and should not, rely on potential environmental effects alone in determining whether it was appropriate to regulate coal-fired Utility Units under section 112. The EPA, therefore, finds that, based on the record before it at the time, it was in error in determining that it was appropriate to regulate coal-fired Utility Unit HAP emissions under section 112 to the extent that the determination was based in any way on the hazards to public health of non-mercury HAP emissions or on environmental effects resulting from such emissions.

b. It Is Not Necessary to Regulate Coal-fired Units on the Basis of Non-Mercury HAP Emissions. In determining whether it is appropriate and necessary to regulate Utility Unit HAP emissions under section 112, the threshold question is whether it is appropriate to regulate such emissions at all. Where, as here, EPA cannot reasonably conclude that it is appropriate to regulate such emissions, the Agency does not need to resolve the question of whether it is necessary to regulate such emissions under section 112, or elsewhere. In any event, even if EPA could have reasonably concluded that it was appropriate to regulate non-mercury HAP emissions from coal-fired Utility Units, it would not have been reasonable for the Agency to find that it was necessary to regulate such emissions under section 112 since, as discussed above, it should have realized that there was an available alternative mechanism, such as section 111, for regulating such emissions had it been appropriate to do so. See also Section VII below.

B. Revision of the December 2000 Appropriate and Necessary Finding for Oil-fired Units

1. It Is Not Appropriate and Necessary To Regulate Oil-Fired Units on the Basis of Nickel Emission

a. It Is Not Appropriate to Regulate Oil-fired Units on the Basis of Nickel Emissions. In finding that the regulation of HAP emissions from oil-fired Utility Units was appropriate and necessary in its December 2000 Regulatory Determination, EPA did not clearly identify the basis for this finding beyond stating that there remained uncertainties regarding the extent of the public health impact from HAP emissions from oil-fired units and that those uncertainties led the Administrator to find that regulation of HAP emission from such units under section 112 is appropriate and necessary. (See 65 FR 79825, 79830). Table 1 in the 2000 determination does, however, indicate that nickel is the metallic HAP emitted in the largest quantities by oil-fired Utility Units and that some nickel compounds are carcinogenic. (See 65 FR 79825, 79828). It therefore appears that EPA's finding was based at least in part on its concerns regarding perceived hazards to public health arising from inhalation exposure to nickel emissions from oil-fired Utility Units. This is consistent with the Utility Study which, based on very conservative assumptions regarding the carcinogenicity of the nickel emitted by such units, identifies nickel as the HAP emitted by oil-fired Utility Units which poses the highest cancer maximum individual risk. (Utility Study, Table 6-3, p. 6-8). The Utility Study identifies 11 oil-fired utility plants as having emissions causing maximum individual risk of cancer greater than 10

−6

based on nickel emissions (

Id.

)

In the Proposed Rule, EPA stated that it continued to believe that the record supports a distinction between the treatment of nickel emissions from oil-fired Utility Units and other non-nickel HAP emissions from such units. EPA proposed to conclude that it was not appropriate to regulate the non-Ni HAP. EPA also proposed to treat nickel from oil-fired units differently based on the amount of nickel emitted annually and the scope of adverse health effects (See 69 FR 4652, 4688). Based on its analysis of new information obtained in response to the Proposed Rule, EPA has determined that the distinction between nickel and the remaining HAP from oil-fired units cannot be supported. EPA finds that it is not appropriate to regulate nickel emissions from oil-fired Utility Units and that it is, therefore, not appropriate to regulate oil-fired Utility Units. This finding is based on the following: (1) The significant reductions in the total nationwide inventory of oil-fired Utility Units; and (2) the changing fuel mixtures being used at the remaining units.

Nickel emissions from oil-fired Utility Units have been substantially reduced since the 1998 Utility Report to Congress through a combination of unit closures and fuel switching. The 11 oil-fired plants identified in the Utility Study as having emissions causing a maximum individual risk of cancer greater than 10

−6

based on nickel emissions were comprised of 42 individual units. Of those 42 units, 12 units have permanently ceased operation or are out of service. (OAR-2002-0056-2046 at pp. 12-13; OAR-2002-0056-5998). In addition, 6 of the original 42 units have reported to the U.S. Department of Energy (DOE) that their fuel mix now includes natural gas. Earlier reports did not show these units as using natural gas as a fuel. (OAR-2002-0056-5998). The use of natural gas as a part of their fuel mix would decrease the nickel emissions from these 6 units. Similarly, another 5 units report using a mix of natural gas and distillate oil (rather than residual oil) in

2003. (OAR-2002-0056-5998). Since distillate oil contains less nickel than the residual oil previously burned by these units, it is reasonable to assume that these units currently emit less nickel than was previously the case. Another 2 units now fire a residual oil/natural gas mixture and have limited their residual oil use through permit restrictions to no greater than 10 percent of the fuel consumption between April 1 and November 15, with natural gas being used for at least 90 percent of total fuel consumption. (OAR-2002-0056-2046 at p. 13). Finally, five units have effectively eliminated their nickel emissions since the Utility Study by switching to burning natural gas exclusively. (OAR-2002-0056-2046 at pp. 12-13; OAR-2002-0056-5998). Taken as a whole, these changes mean that 30 of the original 42 units identified in the Utility Study have taken steps to reduce or actually eliminate their nickel emissions. Of the original 11 plants identified in the Utility Study, only 2, both in Hawaii, have units for which actions that will result in reduced nickel emissions do not appear to have been taken. (OAR-2002-0056-6871) In addition to the closure of the 12 units identified as being of potential concern in the Utility Study, there has been a steady decrease in the number of oil-fired Utility Units generally over the past decade and this trend is likely to continue. In fact, the latest DOE/EIA projections (OAR-2002-0056-5999) estimate no new utility oil-fired generating capacity and decreasing existing oil-fired generating capacity through 2025, with an additional 29.2 gigawatts of combined oil- and natural gas-fired existing capacity being retired by 2025.

Based on the foregoing, EPA concludes that it is not appropriate to regulate oil-fired Utility Units under section 112 because we do not anticipate that the remaining level of utility nickel emissions will result in hazards to public health.

b. It Is Not Necessary to Regulate Oil-fired Units on the Basis of Nickel Emissions. Because EPA could not have reasonably found that it was appropriate to regulate nickel emissions from oil-fired Utility Units based on the record before it at the time of the December 2000 Regulatory Determination, it should not have made a finding that it was necessary to regulate such emissions. Information obtained in the course of the rulemaking since the Proposed Rule has confirmed this conclusion. In any event, even if EPA could have reasonably concluded that it was appropriate to regulate nickel emissions from oil-fired Utility Units, it would not have been reasonable for the Agency to find that it was necessary to regulate such emissions under section 112 since, as discussed above, it should have realized that there was an available alternative mechanism, section 111, for regulating such emissions had it been appropriate to do so. See also Section VII below.

2. It Is Not Appropriate and Necessary To Regulate Oil-Fired Units on the Basis of Non-Nickel HAP Emissions

a. It Is Not Appropriate to Regulate Oil-fired Units on the Basis of Non-nickel HAP Emissions. As is the case with emissions of nickel, the record before EPA at the time of the December 2000 Regulatory Determination does not reasonably support a finding that it is appropriate to regulate emissions of any other HAP from oil-fired Utility Units. In the December 2000 Regulatory Determination, EPA stated that there remain uncertainties regarding the extent of the public health impact from HAP emissions from oil-fired Utility Units and, on that basis, found that it was appropriate and necessary to regulate oil-fired Utility Units under section 112. (See 65 FR 79825, 79830.) The EPA neither identified the HAP concerning which there were uncertainties nor identified what those uncertainties were. EPA has neither discovered information on hazards to public health arising from the remaining non-nickel emissions of oil-fired Utility Units, nor received such information in response to the Proposed Rule. EPA therefore concludes that its appropriate finding in December 2000 lacked foundation because, given the level of remaining non-nickel HAP emissions from Utility Units, the Agency did not and does not have any information on the hazards to public health reasonably anticipated to occur. Indeed, the uncertainties that exist with regard to the data and information on these emissions are so great that the Agency has not identified any hazards to public health.

b. It Is Not Necessary to Regulate Oil-fired Units on the Basis of Non-nickel HAP Emissions. Because EPA finds that it is not appropriate to regulate oil-fired Utility Units on the basis of non-nickel HAP emissions, it also finds that it is not necessary to regulate oil-fired Utility Units on the basis of such emissions. In any event, even if EPA could have reasonably concluded that it was appropriate to regulate non-nickel HAP emissions from oil-fired Utility Units, it would not have been reasonable for the Agency to find that it was necessary to regulate such emissions under section 112 since, as discussed above, it should have realized that there was an available alternative mechanism, section 111, for regulating such emissions had it been appropriate to do so. See also Section VII below.

V. Statutory and Regulatory Overview of CAA Section 110(a)(2)(D) and Summary of EPA's Clean Air Interstate Rule, Which Implements Section 110(a)(2)(D)

A. The Clean Air Interstate Rule and Clean Air Act Section 110(a)(2)(D)

1. Background for Promulgation of the Clean Air Interstate Rule

The Administrator signed the notice of final rulemaking for the Clean Air Interstate Rule (CAIR) on March 10, 2005. The background for CAIR is fully described in the preambles to the final rule, the notice of proposed rulemaking, 69 FR 4565 (January 30, 2004) and the notice of supplemental rulemaking, 69 FR 12398 (March 16, 2004), and is briefly summarized below.

a. PM 2.5 NAAQS, 8-hour Ozone NAAQS, and the Nonattainment Problems. By notice dated July 18, 1997, we revised the NAAQS for particulate matter to add new standards for fine particles, using as the indicator particles with aerodynamic diameters smaller than a nominal 2.5 micrometers, termed PM 2.5. 62 FR 38652. We established health- and welfare-based (primary and secondary) annual and 24-hour standards for PM 2.5. The annual standard is 15 micrograms per cubic meter, based on the 3-year average of annual mean PM 2.5 concentrations. The 24-hour standard is a level of 65 micrograms per cubic meter, based on the 3-year average of the annual 98th percentile of 24-hour concentrations.

By a separate notice dated July 18, 1997, EPA also promulgated a revised primary NAAQS for ozone (and an identical secondary ozone NAAQS). This revised NAAQS, termed the 8-hour NAAQS, specified that the 3-year average of the fourth highest daily maximum 8-hour average ozone concentration could not exceed 0.08 ppm. (

See

40 CFR 50.10) In general, the revised 8-hour standard is more protective of public health and the environment and more stringent than the pre-existing 1-hour ozone standard. Following promulgation of the 8-hour ozone and the PM 2.5 NAAQS, EPA anticipated that many areas of the country, particularly in the eastern half of the country, would have air quality violating one or both of those NAAQS.

Environmental Protection Agency, 1996. Review of the National Ambient Air Quality Standards for Particulate Matter: Policy Assessment

of Scientific and Technical Information. OAQPS Staff Paper. Research Triangle Park, NC: Office of Air Quality Planning and Standards; Report No. EPA-45/R-96-013.

b. SO

and NO

as Precursors for PM 2.5 and 8-hour Ozone. Fine particles are emitted directly from emissions sources and also can be formed in the atmosphere through the reaction of gaseous precursors. Sulfur dioxide and nitrogen oxides are among the primary precursors to the “secondary” formation of PM 2.5.

Eight-hour ozone is exclusively a secondary pollutant. Ozone is formed by natural processes at high altitudes, in the stratosphere, where it serves as an effective shield against penetration of harmful solar UV-B radiation to the ground. The ozone present at ground level as a principal component of photochemical smog is formed in sunlit conditions through atmospheric reactions of two main classes of precursor compounds: VOCs and NO

(mainly NO and NO

). Nitrogen oxides are emitted by motor vehicles, power plants, and other combustion sources, with lesser amounts from natural processes including lightning and soils.

Both PM 2.5 and 8-hour ozone are regional phenomena; that is each is caused by emissions over a broad geographic area. As a result, attainment of the PM 2.5 NAAQS requires reductions in SO

and NO

over a widespread area, and attainment of the 8-hour ozone NAAQS requires reductions in NO

over a widespread area. In the CAIR proposal, EPA described the photochemistry and need for regionwide reductions of precursors of both pollutants in detail.

See

69 FR at 4572.

After promulgation of the PM 2.5 NAAQS, EPA was generally aware of the role of SO

and NO

emissions in the PM 2.5 nonattainment problem, and, therefore, of the need for widespread reductions. Similarly, after promulgation of the 8-hour ozone NAAQS, EPA was aware of widespread nonattainment, due to nonattainment of the pre-existing, one-hour ozone standard, and therefore of the need for widespread NO

reductions.

c. Coal-fired Utility Units Emit A Large Portion of SO

and NO

Emissions. Utility Units emit a large portion of both the SO

and NO

inventory. Congress clearly recognized that the utility industry emits a large portion of the nation's inventory of SO

and NO

emissions when Congress enacted the acid deposition provisions in the 1990 Clean Air Act Amendments. EPA noted in the CAIR proposal that Utility Units—

are the most significant source of SO

emissions and a very substantial source of NO

in the * * * region [proposed to be affected by CAIR]. For example, EGUs [Utility Units] emissions are projected to represent approximately one-quarter (23 percent) of the total NO

emissions in 2010 and over two-thirds (67 percent) of the total emissions in 2010 in the 28-State plus DC region that [EPA proposed for] being controlled for both SO

and NO

after application of current CAA controls.

(

See

69 FR 4565, 4609-10 January 30, 2004.)

Beginning in the mid-1990s, EPA has considered regional and national strategies to reduce interstate transport of SO

and NO

. EPA described these efforts in the CAIR notice of final rulemaking.

3. Legal Authority

As noted above, in 1997, EPA revised the NAAQS for PM to add new annual average and 24-hour standards for fine particles, using PM 2.5 as the indicator (62 FR 38652). At the same time, EPA issued its final action to revise the NAAQS for ozone to establish new 8-hour standards (62 FR 38856.) Following promulgation of new NAAQS, the CAA requires all areas, regardless of their designation as attainment, nonattainment, or unclassifiable, to submit SIPs containing provisions specified under section 110(a)(2). SIPs for nonattainment areas are generally required to include additional emissions controls providing for attainment of the NAAQS. In addition, under the authority of section 110(a)(2)(D) and other provisions of section 110, EPA promulgated the NO

SIP-Call in 1998. In that rulemaking, EPA determined that 22 States and the District of Columbia in the eastern half of the country significantly contribute to 1-hour and 8-hour ozone nonattainment problems in downwind States.

This rule required those jurisdictions to revise their SIPs to include NO

control measures to mitigate the significant ozone transport. The EPA determined the emissions reductions requirements by projecting NO

emissions to 2007 for all source categories and then reducing those emissions through controls that EPA determined to be highly cost-effective. The affected States were required to submit SIPs providing the resulting amounts of emissions reductions.

See

“Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone; Final Rule,” 63 FR 57356 (October 27, 1998). The EPA also published two Technical Amendments revising the NO

SIP Call emission reduction requirements. (64 FR 26298; May 14, 1999 and 65 FR 11222; March 2, 2000).

Under the NO

SIP-Call, States had the flexibility to determine the mix of controls to meet their emissions reductions requirements. However, the rule provided that if the SIP controls Utility Units, then the SIP must establish a budget, or cap, for Utility Units. The EPA recommended that each State authorize a trading program for NO

emissions from Utility Units. We developed a model cap and trade program that States could voluntarily choose to adopt, and all did so.

4. CAIR

In CAIR, EPA established SIP requirements for the affected upwind States under the authority of CAA section 110(a)(2)(D) and other provisions of section 110.

Based on air quality modeling analyses and cost analyses, EPA concluded that SO

and NO

emissions in certain States in the eastern part of the country, through the phenomenon of air pollution transport, contribute significantly to downwind nonattainment of the PM 2.5 and 8-hour ozone NAAQS. In CAIR, EPA required SIP revisions in 28 States and the District of Columbia to reduce SO

and/or NO

emissions, which are important precursors of PM 2.5 (NO

and SO

) and ozone (NO

). The affected States and the District of Columbia are required to adopt and submit the required SIP revision with the necessary control measures by 18 months from date of signature of CAIR.

The 23 States along with the District of Columbia that must reduce annual NO

emissions for the purposes of the PM 2.5 NAAQS are: Alabama, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.

See

“Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone (Interstate Air Quality Rule); Proposed Rule,” 69 FR 4566 (January 30, 2004); “Supplemental Proposal for the Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Proposed Rule,” 69 FR 32684 (June 10, 2004); and the final rule “Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule),” which was recently issued.

The 25 States along with the District of Columbia that must reduce NO

emissions for the purposes of the 8-hour ozone NAAQS are: Alabama, Arkansas, Connecticut, Delaware, Florida, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina,

Tennessee, Virginia, West Virginia, and Wisconsin.

The emissions reductions requirements are based on controls that EPA determined to be highly cost-effective for Utility Units. However, States have the flexibility to choose the measures to adopt to achieve the specified emissions reductions. If the State chooses to control Utility Units, then it must establish a budget—that is, an emissions cap—for those sources. CAIR defines the Utility Units budgets for each affected State. Due to feasibility constraints, EPA is requiring that emissions reductions be implemented in two phases, with the first phase in 2009 (for NO

) and 2010 (for SO

), and the second phase in 2015.

As noted above, under the CAIR, each State may independently determine which emissions sources to subject to controls, and which control measures to adopt. The EPA's analysis indicates that emissions reductions from Utility Units are highly cost-effective, and in the CAIR, EPA encouraged States to adopt controls for Utility Units. States that do so must place an enforceable limit, or cap, on Utility Unit's emissions. The EPA calculated the amount of each State's Utility Unit emissions cap, or budget, based on reductions that EPA determined are highly cost-effective. States may allow their Utility Units to participate in an EPA-administered cap-and-trade program as a way to reduce the cost of compliance, and to provide compliance flexibility. The EPA will administer these programs, which will be governed by rules provided by EPA that States may adopt or incorporate by reference.

EPA estimated that the CAIR would reduce annual SO

emissions by 3.6 million tons by 2010 and by 4.0 million tons by 2015; and would reduce annual NO

emissions by 1.3 million tons by 2010 and by 1.5 million tons by 2015. If all the affected States choose to achieve these reductions through Utility Unit controls, then Utility Unit emissions in the affected States would be capped at 3.7 million tons in 2010 and 2.6 million tons in 2015; and Utility Unit annual NO

emissions would be capped at 1.5 million tons in 2010 and 1.3 million tons in 2015. The EPA estimated that the required SO

and NO

emissions reductions would, by themselves, bring into attainment 52 of the 80 counties that are otherwise expected to be in nonattainment for PM 2.5 in 2010, and 57 of the 75 counties that are otherwise expected to be in nonattainment for PM 2.5 in 2015. The EPA further estimated that the required NO

emissions reductions would, by themselves, bring into attainment 3 of the 40 counties that are otherwise expected to be in nonattainment for 8-hour ozone in 2010, and 6 of the 22 counties that are expected to be in nonattainment for 8-hour ozone in 2015. In addition, the CAIR would improve PM 2.5 and 8-hour ozone air quality in the areas that would remain nonattainment for those two NAAQS after implementation of CAIR. Because of the CAIR, the States with those remaining nonattainment areas will find it less burdensome and less expensive to reach attainment by adopting additional local controls. The CAIR would also reduce PM 2.5 and 8-hour ozone levels in attainment areas.

C. Utility Mercury Emission Reductions Expected as Co-Benefits From CAIR

The final CAIR requires annual SO

and NO

reductions in 23 States and the District of Columbia, and also requires ozone season NO

reductions in 25 States and the District of Columbia. Many of the CAIR States are affected by both the annual SO

and NO

reduction requirements and the ozone season NO

requirements. CAIR was designed to achieve significant emissions reductions in a highly cost-effective manner to reduce the transport of fine particles that have been found to contribute to nonattainment. EPA analysis has found that the most efficient method to achieve the emissions reduction targets is through a cap-and-trade system on the power sector that States have the option of adopting. In fact, States may choose not to participate in the optional cap-and-trade program and may choose to obtain equivalent emissions reductions from other sectors. However, EPA believes that a region-wide cap-and-trade system for the power sector is the best approach for reducing emissions. The power sector accounted for 67 percent of nationwide SO

emissions and 22 percent of nationwide NO

emissions in 2002.

EPA expects that States will choose to implement the final CAIR program in much the same way they chose to implement their requirements under the NO

SIP Call. As noted above, under the NO

SIP Call, EPA gave States ozone season NO

reduction requirements and the option of participating in a cap-and-trade program. In the final rulemaking, EPA analysis indicated that the most efficient method to achieve reductions targets would be through a cap-and-trade program. Each affected State, in its approved SIP, chose to control emissions from Utility Units and to participate in the cap-and-trade program.

Therefore, EPA anticipates that States will comply with CAIR by controlling Utility Unit SO

and NO

emissions. Further, EPA anticipates that States will implement those reductions through the cap-and-trade approach, since the power sector represents the majority of national SO

emissions and the majority of stationary NO

emissions, and represent highly cost-effective SO

and NO

sources to reduce. For further discussion of cost-effectiveness, see section IV of CAIR notice of final rulemaking. EPA modeled a region-wide cap and trade system on the power sector for the States covered by CAIR, and this modeling projected that most reductions in NO

and SO

would come through the installation of scrubbers, for SO

control, and selective catalytic reduction for NO

control (see Regulatory Impact Assessment for CAIR and CAMR in docket). Scrubbers and SCR are proven technologies for controlling SO

and NO

emissions and sources installed them to comply with the Acid Rain trading program and the NO

SIP Call trading program. EPA's modeling also projected that the installation of these controls would achieve Hg emission reductions as a co-benefit.

EPA projections of Hg co-benefits are based on 1999 Hg ICR emission test data and other more recent testing conducted by EPA, DOE, and industry participants. (For further discussion see Control of Emissions from Coal-Fired Electric Utility Boilers: An Update, EPA/Office of Research and Development, March 2005, in the docket). That emission testing has provided a better understanding of Hg emissions and their capture in pollution control devices. Mercury speciates into three basic forms, ionic, elemental, and particulate (particulate represents a small portion of total emissions). In general, ionic Hg compounds are more readily absorbed than elemental Hg and the presence of chlorine compounds (which tend to be higher for bituminous coals) results in increased ionic Hg. Overall the 1999 Hg ICR data revealed higher levels of Hg capture for bituminous coal-fired plants as compared to subbituminous and lignite coal-fired plants and a significant capture of ionic Hg in wet SO

scrubbers. Additional Hg testing indicates that for bituminous coals SCR has the ability to convert elemental Hg to ionic Hg and thus allow easier capture in a wet scrubber. This understanding of Hg capture was incorporated into EPA modeling assumptions and is the basis for our projections of Hg co-benefits from installation of scrubbers and SCR under CAIR.

The final CAIR requires annual SO

and NO

reductions in two phases, the

first phase in 2010 and the second phase in 2015. EPA modeling of CAIR projected that most reductions in NO

and SO

would come through the installation of scrubbers and SCR, and that the installation of these controls would also achieve Hg emission reductions as a co-benefit. Given the history of the Acid Rain and NO

SIP Call trading programs, and our experience with those programs, we anticipate that reductions in SO

emissions will begin to occur before 2010 because of the ability to bank SO

emission allowances, though to some degree this is limited by the time and resources needed to install control technologies. Companies have an incentive to achieve greater SO

reductions than needed to meet the current Acid Rain cap because the excess allowances they generate can be “banked” and either later sold on the market or used to demonstrate compliance in 2010 and beyond at the facility that generated the excess allowances. Based on the analysis of CAIR, EPA's modeling projects that Hg emissions would be 38.0 tons (12 tons of non-elemental Hg) in 2010, 34.4 tons in 2015 (10 tons of non-elemental Hg), and 34.0 tons in 2020 (9 tons of non-elemental Hg), about a 20 and 30 percent reduction (in 2010 and 2015, respectively) from a 1999 baseline of 48 tons.

For further discussion of EPA modeling results and projected emissions see Chapter 8 of the Regulatory Impact Assessment.

As discussed in the TSD, the emissions of reactive gaseous Hg and particle-bound Hg are most important for local and regional Hg deposition purposes, since they are substantially more likely to be deposited than elemental Hg. CAIR and CAMR will significantly reduce reactive gaseous Hg and particle bound Hg from 2001 levels. CAIR will reduce the levels from approximately 22 tons to 9 tons. CAMR will reduce this level further to between 7 and 9 tons, for a total reduction (with CAIR) of roughly 70 percent.

In addition to CAIR, EPA recently promulgated another rule for Utility Units. Specifically, on March 15, 2005, the Administrator signed a final rulemaking called the Clean Air Mercury Rule (“CAMR”) pursuant to CAA section 111. This rule sets standards of performance for Hg emitted from both new and existing coal-fired Utility Units. Like CAIR, the rule establishes a cap-and-trade mechanism by which Hg emissions from new and existing coal-fired Utility Units are capped at specified, nation-wide levels. The first phase cap of 38 tons per year (“tpy”) becomes effective in 2010 and the second phase cap of 15 tpy becomes effective in 2018. Facilities must demonstrate compliance with the standards of performance by holding one “allowance” for each ounce (oz) of Hg emitted in any given year. Allowances are readily transferrable among all regulated units. As explained in section VI below, the level of Hg emissions remaining after implementation of CAMR do not result in hazards to public health.

VI. Scientific and Technical Background and EPA'S Conclusions Concerning the Level of Utility Attributable Mercury Emissions After CAIR and CAMR

In this section, we explain why we believe the level of utility attributable Hg emissions remaining after imposition of CAIR, and independently, CAMR, will not result in hazards to public health. The issue of whether utility Hg emissions remaining after CAIR, and independently CAMR, result in hazards to public health is directly related to our conclusion, stated above in Section IV.A, that we cannot find it appropriate and necessary to regulate coal-fired Utility Units under section 112 on the basis of Hg emissions. This section includes an overview of the scientific and technical information relevant to evaluating utility Hg emissions and the public health impacts associated with such emissions. Below, we provide general background concerning the health impacts of methylmercury; the predominant exposure pathway by which humans are affected by methylmercury, which is by ingestion of fish containing methylmercury; and EPA's methodology for determining the impacts of utility Hg emissions on the amount of methylmercury found in fish tissue. This section also includes a summary of our conclusions, including that utility Hg emissions remaining after implementation of CAIR, and independently CAMR, are not reasonably anticipated to result in hazards to public health.

A. Human Health Impacts of Methylmercury Exposure and Amounts of Hg Emissions

Hg is a persistent, bioaccumulative toxic metal that is emitted from power plants in three forms: Elemental mercury (Hg\0\), oxidized mercury (Hg\++\) compounds, as well as particle-bound mercury. Methylmercury is formed by microbial action in the top layers of sediment and soils, after Hg has precipitated from the air and deposited into water bodies or land. Once formed, methylmercury is taken up by aquatic organisms and bioaccumulates up the aquatic food web. Larger predatory fish may have methylmercury concentrations many times that of the water body in which they live.

While Hg is toxic to humans when it is inhaled or ingested, we focus on oral exposure of methylmercury in this rulemaking, as it is the route of primary interest for human exposures in the U.S. Methylmercury is a well-established human neurotoxicant. Methylmercury that is ingested by humans is readily absorbed from the gastrointestinal tract and can cause effects in several organ systems. The best studied effect of low level exposure is the ability of methylmercury to cause subtle, yet potentially important neurodevelopmental effects. Of particular concern is the effect of methylmercury on the developing fetal nervous system exposed in utero from maternal fish ingestion. Large prospective epidemiological studies have reported that prenatal methylmercury from environmental exposures has been associated with poor performance on neurobehavioral tests in children. These include tests that measure attention, visual-spatial ability, verbal memory, language skills, and fine motor function. These studies have been thoroughly reviewed, singly and as part of review groups, by many expert scientists, including a panel of the National Research Council (NRC) of the National Academy of Sciences (NAS).

While important, the weight of evidence for cardiovascular effects is not as strong as it is for childhood neurological effects and the state of the science is still being evaluated. However, some recent epidemiological studies in men suggest that methylmercury is associated with a higher risk of acute myocardial infaraction, coronary heart disease and cardiovascular disease in some populations. Other recent studies have not observed this association. The findings to date and the plausible biological mechanisms warrant additional research in this area (Stern 2005; Chan and Egeland 2004). There is some recent evidence that methylmercury may result in genotoxic or immunotoxic effects. Overall, there is a relatively small body of evidence from human studies that suggests exposure to methylmercury can result in immunotoxic effects and the NRC concluded that evidence that human exposure caused genetic damage is inconclusive. There are insufficient human data to evaluate whether these effects are consistent with levels in the U.S. population. Because the developing fetus may be the most sensitive to the effects from methylmercury, women of

child-bearing age are regarded as the population of greatest interest when assessing methylmercury exposure.

Studies investigating the relationship between methylmercury and cardiovascular effects have reached different conclusions. Some recent epidemiological studies of men suggest that methylmercury is associated with a higher risk of acute myocardial infarction, coronary heart disease and cardiovascular disease in some populations. Other research with less corroboration suggest that reproductive, renal, and hematological impacts may be of concern. There are insufficient human data to evalaute whether these effects are consistent with levels in the U.S. population.

See

RIA for CAMR chapter 2.

The predominant pathway of Hg exposure to both humans and wildlife is consumption of fish. Critical elements in estimating methylmercury exposure and risk from fish consumption include the concentrations of methylmercury in the fish consumed, the quantity of fish consumed,

and how frequently the fish is consumed. There is a great deal of variability among individuals in fish consumption rates. However, our analysis indicates that the typical U.S. consumer eating moderate amounts of a wide variety of low-mercury fish from restaurants and grocery stores is not expected to ingest harmful levels of methylmercury from fish. Those who regularly and frequently consume large amounts of fish, or fish with higher levels of methylmercury, are more exposed. The EPA and Food and Drug Administration jointly, as well as states, have issued fish consumption advisories to inform people of ways to reduce exposure to methylmercury from fish.

A precise estimate of methylmercury exposure depends on quantity of fish consumed as a function of an individual's body weight.

As part of its long term U.S. population surveillance, the U.S. Centers for Disease Control (CDC) assessed Hg concentrations in blood of over 3,600 women of child-bearing age under the National Health and Nutrition Examination Survey (NHANES). A recent analysis of these data reported that about 6 percent of these women of child-bearing age have levels of Hg in their blood that are at or above the U.S. EPA's RfD, described below. The CDC also surveyed the same group of women about their eating habits. An analysis of 1500 of these women showed that Hg blood levels were higher in the women who reported eating three or more servings of fish in the month before they were tested. It is reasonable to conclude that methylmercury contained in seafood may be responsible for elevated levels of Hg in U.S. women of child-bearing age.

289 JAMA 1667 (April 2, 2003).

As described below, the analysis supporting today's action focuses on assessing exposure from freshwater fish caught and consumed by recreational and subsistence anglers because available information indicate that U.S. utility Hg emissions may affect the methylmercury concentrations in these fish. EPA also considered the following fish consumption pathways: Consumption from commercial sources (including saltwater and freshwater fish from domestic and foreign producers); consumption of recreationally caught marine fish, consumption of recreationally caught estuarine fish; and consumption of commercial fish raised at fish farms (aquaculture). For a number of reasons, as explained in the TSD, current information does not suggest that these latter pathways present meaningful risks of ingestion of utility-attributable methylmercury.

The EPA's 1997 Mercury Study Report to Congress suggests a plausible link between anthropogenic releases of Hg from industrial and combustion sources in the U.S. and methylmercury in fish in the U.S. However, other sources of Hg emissions, including Hg from natural sources (such as volcanos) and anthropogenic emissions in other countries, contribute to the levels of methylmercury observed in fish in the U.S.

Our current understanding of the global Hg cycle and the impact of the anthropogenic sources allow us to make estimates on a global, continental, or regional scale of their relative importance. It is more difficult to make accurate predictions of the fluxes on a local scale given our current understanding.

Recent Hg estimates (which are highly uncertain) of annual total global emissions from all sources (natural and anthropogenic) are about 5,000 to 5,500 tons per year (tpy). Of this total, about 1,000 tpy are estimated to be natural emissions and about 2,000 tpy are estimated to be contributions through the natural global cycle of re-emissions of Hg associated with past natural releases and anthropogenic activity. Current anthropogenic emissions account for the remaining 2,000 tpy. Given the global estimates noted above, U.S. anthropogenic Hg emissions are estimated to account for roughly 3 percent of the global total, and U.S. utilities are estimated to account for about 1 percent of total global emissions. Deposition from U.S. utilities is described in greater detail below. Utility RTC at 7-1 to 7-2; Mercury NPR, 69 FR 4657-58 (January 20, 2004); RIA for CAMR chapters 5-6.

We recognize that it is also difficult to quantify with precision how a specific change in air deposition of Hg leads to a change in fish tissue levels. We further recognize that the relationship between the amount of Hg emissions reduced and the attendant reduction in methlymercury fish concentrations depends upon the specific characteristics of the waterbody at issue. Nevertheless, science continues to evolve and EPA has made substantial progress in developing methods for assessing the amount of methylmercury in fish tissues that may be traced to emissions from coal-fired U.S. Utility Units. We describe our methodology below and why this methodology is sufficient to support today's action.

As discussed above, we are focusing on consumption of self-caught, freshwater fish. We estimate that there are approximately 27.9 million recreational freshwater fishers in the U.S. population, including fishers who do not eat (

e.g.,

release) their catch. Based on application of a “consuming” factor and a “sharing” factor to the estimate of recreational fishers, as discussed further in the RIA to CAMR, we estimate that approximately 58.6 million individuals in the U.S. population consume recreationally-caught freshwater fish. Of these individuals, we estimate that approximately 7.5 to 10.5 million are women of child-bearing age (that is, 15-44 years old), about 500,000 of whom are expected to give birth in any one year. We estimate that the mean recreational freshwater fish consumption rate for these women is 8 grams/day, and the 95th percentile recreational freshwater fish consumption rate is 25 grams/day. A subset of recreational freshwater fish consumers may consume at higher levels, as discussed below. In addition, subsistence fishers and fishers in certain ethnic groups are expected to have generally higher fish consumption rates than consumers of recreational freshwater fish. These sub-populations are discussed below.

B. The Methylmercury Reference Dose

EPA generally quantifies risk of adverse health effects other than cancer by calculating a reference value (RfV). In general, an RfV is an estimation of an exposure that is likely to be without an appreciable risk of adverse effects over a lifetime. See

http://www.epa.gov/iris/gloss8.htm.

RfVs for exposure by ingestion are called reference doses (RfD).

The EPA defines an RfD as “an estimate (with uncertainty spanning perhaps an order of magnitude) of a daily oral exposure to the human population (including sensitive subgroups) that is likely to be without an appreciable risk of deleterious effects during a lifetime. It can be derived from a NOAEL (no observed adverse effect level), LOAEL (lowest observed adverse effect level), or benchmark dose, with uncertainty factors generally applied to reflect limitations of the data used.”

See http://www.epa.gov/iris/gloss8.htm

As stated above, an RfD is derived by choosing a point of departure from animal or human data. This can be a NOAEL or LOAEL, either of which may be defined by applying statistical tests and scientific judgment to the data. When the data are sufficient, one can apply a mathematical model to obtain a benchmark dose (BMD). The BMD is the dose at which a particular level of response (

i.e.

, the benchmark response,

or BMR) for some outcome of concern is found to occur. One can then derive a BMD lower confidence limit (BMDL), which is a statistical lower bound on the chosen BMD, an exposure expected to produce a specified effect in some defined percentage of a test population.

The point of departure (again, NOAEL, LOAEL, or BMDL) is divided by uncertainty/variability factors to arrive at the RfD. The uncertainty factors are intended to account for variability and uncertainty in the data. The size of an uncertainty/variability factor is determined by the adequacy or limitations of the data and is typically either 10 or 3 for each type of variabilty. For example, uncertainty factors may be employed for extrapolating from animals to humans, variability in human susceptibility (sensitive populations), and extrapolating from subchronic to chronic exposures. The resulting RfD is believed to be the amount of a chemical which, when ingested daily over a lifetime, is likely to be without an appreciable risk of deleterious effects to humans, including sensitive subpopulations.

In 2001, EPA published an RfD for methylmercury that is based on a BMD approach. This quantitative risk estimate was based on data from developmental neurotoxicity studies mentioned above; specifically, deficits in tests associated with ability to learn and process information. EPA applied an uncertainty/variability factor of 10 to the point of departure (BMDL) to derive the RfD. EPA's RfD for methylmercury is 0.1 μg/kg bw/day, which is 0.1 micrograms of Hg per day for each kilogram of a person's body weight.

As noted in the Hg Proposal, at the direction of Congress, EPA funded the NAS to perform an independent evaluation of the available data related to the health impacts of methylmercury and provide recommendations for EPA's RfD. The NAS/National Research Council (NRC) conducted an 18-month study of the available data on the health effects of methylmercury. The review by the NAS, published in July 2000, concluded that the neuro-developmental effects are the most sensitive and well-documented effects of methylmercury exposure. The NRC advised revising the basis of the RfD, which used data from a short-term exposure in Iraq, to incorporate new studies on children exposed in utero when their mothers ate seafood containing Hg. EPA subsequently established a reference dose of 0.0001 mg/kg bw/day. NAS determined that EPA's RfD “is a scientifically justified level for the protection of public health.”

The methylmercury RfD is further described in the RIA, chapter 2 and in other EPA documents (IRIS, U.S. EPA 2001; Water Quality Criteria for the Protection of Human Health: Methylmercury, EPA-823-R-01-001). Briefly, EPA used as the point of departure BMDLs for multiple endpoints from the three studies of in utero methylmercury exposure and effects. These were conducted in the Faroes and Seychelles Islands and in New Zealand.

All of the endpoints were children's scores on neuropsychological tests. Consistent with NRC recommendations, an uncertainty/variability factor of 10 was used to account for pharmacokinetic and pharmacodynamic variability in the human population. In the EPA documents, one data set from the Faroes (Boston Naming Test, full cohort) is displayed for all calculations as an example of the multiple BMDLs which serve as the basis for the RfD.

More specifically, the subjects of the Seychelles longitudinal prospective study were 779 mother-infant pairs from a fish-eating population (Myers

et al.

, 1995a-c, 1997; Davidson

et al.

, 1995, 1998). Infants were followed from birth to 5.5 years of age, and assessed at various ages on a number of standardized neuropsychological endpoints. The independent variable was maternal-hair Hg levels. The Faroe Islands study was a longitudinal study of about 900 mother-infant pairs (Grandjean

et al.

, 1997). The main independent variable was cord-blood Hg; maternal-hair Hg was also measured. At 7 years of age, children were tested on a variety of tasks designed to assess function in specific behavioral domains. The New Zealand study was a prospective study in which 38 children of mothers with hair Hg levels during pregnancy greater than 6 ppm were matched with children whose mothers had lower hair Hg levels (Kjellstrom

et al.

, 1989, 1986). At 6 years of age, a total of 237 children were assessed on a number of neuropsychological endpoints similar to those used in the Seychelles study (Kjellstrom

et al.

, 1989). The Seychelles study yielded no statistically significant evidence of impairment related to in utero methylmercury exposure, whereas the other two studies found dose-related effects on a number of neuropsychological endpoints. In the assessment described here, an integrative analysis of all three studies was relied upon in setting the point of departure for derivation of the RfD. As noted by NRC in reference to data from the Seychelles, Faroe Islands, and New Zealand, “because those data are epidemiological, and exposure is measured on a continuous scale, there is no generally accepted procedure for determining a dose at which no adverse effects occur.” (NRC 2000)

In determining the RfD for methylmercury, EPA said that the “RfD can be considered a threshold for a population at which it is unlikely that adverse effects will be observed” (Water Quality Criteria for the Protection of Human Health: Methylmercury, EPA-823-R-01-001). The RfD was calculated to be a level “likely to be without an appreciable risk,” of “deleterious effects” for all populations, including sensitive subgroups. EPA does not further quantify the degree of risk which would be expected for exposures at or above the methylmercury RfD. This is the case for all of EPA's RfDs. Additional regulatory values support a similar threshold approach for describing risks to methylmercury exposure. For example, the World Health Organization sets the level at 0.23 μg/kg/day; Health Canada sets the level at 0.2 μg/kg/day; and the Agency for Toxic Substances and Disease Registry (ATSDR) sets a value of 0.3 μg/kg/day.

EPA has established the RfD at a level such that exposures at or below the RfD are unlikely to be associated with appreciable risk of deleterious effects. It is important to note, however, that the RfD does not define an exposure level corresponding to zero risk; exposure near or below the RfD could pose a very low level of risk which EPA deems to be non-appreciable. It is also important to note that the RfD does not define a bright line, above which individuals are at risk of adverse effects.

Further, in EPA's 1989 Residual Risk Report to Congress, we stated:

It should be noted that exposures above an RfD or RfC do not necessarily imply unacceptable risk or that adverse health effects are expected. Because of the inherent conservatism of the RfC/RfD methodology, the significance of exceedances must be evaluated on a case-by-case basis, considering such factors as the confidence level of the assessment, the size of UF used, the slope of the dose-response curve, the magnitude of the exceedance, and the number or types of people exposed at various levels above the RfD or RfC.

U.S. Environmental Protection Agency. 1989. Risk Assessment Guidance for Superfund: Volume I. Human Health Evaluation Manual (Part A). Office of Emergency and Remedial Response. Washington, DC, EPA/541/1-89/002, at 52-53

http://www.epa.gov/oswer/riskassessment/ragsa/pdf/ch8.pdf

(Residual Risk Report). The Residual Risk Report further stated:

It is expected that an HI (

i.e.

, hazard index (HI)), which is the sum of more than one hazard quotient for multiple substances and/or multiple exposure pathways) less than 1 that is derived using target organ specific hazard quotients would ordinarily be considered acceptable. If the HI is greater than 1, then the amount by which the HI is greater than 1, the uncertainty in the HI, the slope of the dose-response curve, and a consideration of the number of people exposed would be considered in determining whether the risk is acceptable. Evaluation of the acceptable value for an HQ (

i.e.

, hazard quotient (HQ), which is the ratio of the exposure level to a reference exposure level (

e.g.

, RfD)) or an HI of 1 also would consider the values of UFs (

i.e.

, uncertainty/variability factor (UF)), which is a default factor—generally 10-fold—used in operationally deriving the RfD or RfC from experimental data) and the confidence in the RfC that are used in the calculation of the HI. In general, it is considered that each UF is somewhat conservative; because all factors are not likely to simultaneously be at their most extreme (highest) value, a combination of several factors can lead to substantial conservatism in the final value. Larger

composite UF lead to more conservative RfC. Conversely, lower composite UF a

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